Exam 20: Budgetary Planning

The following credit sales are budgeted by Terra Co.: January \ 204,000 February 300,000 March 420,000 April 360,000 The company's past experience indicates that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and 8% in the second month following the sale. The anticipated cash inflow for the month of April is

The longer the budget period, the more reliable the estimates of future outcomes.

The invoice cost for merchandise purchases represents 75% of the sales price. All purchases are paid in cash. How much are the budgeted cash disbursements for December?

Dolce Co. estimates its sales at 180,000 units in the first quarter and that sales will increase by 18,000 units each quarter over the year. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $25. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale. Production in units for the third quarter should be budgeted at

The responsibility for expressing management's budgeting goals in financial terms is performed by the

If budgets are to be effective, there must be

Mapleview, Inc. has the following budgeted sales: July $200,000, August $300,000, and September $250,000. 40% of the sales are for cash and 60% are on credit. For the credit sales, 50% are collected in the month of sale, and 50% the next month. The total expected cash receipts during September are

A well-developed budget can operate and enforce itself.

Pell Manufacturing is preparing its direct labor budget for May. Projections for the month are that 33,400 units are to be produced and that direct labor time is three hours per unit. If the labor cost per hour is $12, what is the total budgeted direct labor cost for May?

During September, the capital expenditure budget indicates a $420,000 purchase of equipment. The ending September cash balance from operations is budgeted to be $60,000. The company wants to maintain a minimum cash balance of $30,000. What is the minimum cash loan that must be planned to be borrowed from the bank during September?

A company determined that the budgeted cost of producing a product is $30 per unit. On June 1, there were 80,000 units on hand, the sales department budgeted sales of 300,000 units in June, and the company desires to have 120,000 units on hand on June 30. The budgeted cost of goods sold for June would be

Which of the following statements about budget acceptance in an organization is true?

If a monthly cash budget is prepared properly, there will never be a cash deficiency at the end of any month.

Coordinating the preparation of the budget is the responsibility of the

Bean Manufacturing reported the following information for 2016: $\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { October\quad November } \quad \text { December }$ $\text { Budgeted purchases } \quad \$ 240,000 \quad \$ 256,000 \quad \$ 288,000$ Operating expenses are: Salaries, $100,000; Depreciation, $40,000; Rent, $20,000; Utilities, $28,000 -Operating expenses are paid during the month incurred. -Accounts payable is used only for inventory acquisitions. How much is the budgeted amount of cash to be paid for operating expenses in November?

At January 1, 2016, Deer Corp. has beginning inventory of 2,000 surfboards. Deer estimates it will sell 10,000 units during the first quarter of 2016 with a 12% increase in sales each quarter. Deer's policy is to maintain an ending inventory equal to 25% of the next quarter's sales. Each surfboard costs $100 and is sold for $150. How much is budgeted sales revenue for the third quarter of 2016?

The primary benefits of budgeting include all of the following except it

If budgets are to be effective, all of the following must be present except

The manufacturing overhead budget generally has separate sections for variable, mixed, and fixed costs.

Which of the following is not a proper match-up?