Exam 21: Budgeting

Big Wheel, Inc. collects 25% of its sales on account in the month of the sale and 75% in the month following the sale. Sales on account are budgeted to be $225,000 for March and $250,000 for April. What are the budgeted cash receipts from sales on account for April?

The master budget of a small manufacturer would normally include all necessary component budgets except the capital expenditures budget.

Match each phrase that follows with the term a-e) it describes. -compares actual performance against budgeted goals

Budgeted production for product ZZZ during the month is

After the sales budget is prepared, the production budget is normally prepared next.

A formal written statement of management's plans for the future, expressed in financial terms, is called a budget.

Past performance is the best overall basis for evaluating current performance and assessing the need for corrective action.

Employees view budgeting more positively when goals are established for them by senior management.

The flexible budget is, in effect, a series of static budgets for different levels of activity.

The budgetary unit of an organization which is led by a manager who has both the authority over and responsibility for the unit's performance is known as a

The budgeted direct materials purchases is based on the sum of 1) the materials needed for production and 2) the desired ending materials inventory, less 3) the estimated beginning materials inventory.

A disadvantage of static budgets is that they

The task of preparing a budget should be the sole task of the most important department in an organization.

The objectives of budgeting are 1) establishing specific goals for future operations, 2) executing plans to achieve the goals, and 3) periodically comparing actual results with these goals.

The budgeted finished goods inventory and cost of goods sold for a manufacturing company for the year are as follows: January 1 finished goods, $765,000; December 31 finished goods, $640,000; and cost of goods sold, $2,560,000. The budgeted costs of goods manufactured is

Match each phrase that follows with the term a-e) it describes. -occurs when employee self-interests are different from company goals

Match each phrase that follows with the term a-f) it describes.. -a plan showing the units of goods to be sold and the sales to be derived; usually the starting point in the budgeting process

Goal conflict can be avoided if budget goals are carefully designed for consistency across all areas of the organization.

If Division Inc. expects to sell 200,000 units in the current year, desires ending inventory of 24,000 units, and has 22,000 units on hand as of the beginning of the year, the budgeted volume of production for the year is 202,000 units.

As of January 1 of the current year, the Grackle Company had accounts receivables of $50,000. The sales for January, February, and March were as follows: $120,000, $140,000, and $150,000, respectively. Of each month's sales, 20% are for cash. Of the remaining 80% the credit sales), 60% are collected in the month of sale, with the remaining 40% collected in the following month. What is the total cash collected both from accounts receivable and for cash sales) in the month of February?