Exam 23: Budgetary Planning

Bean Manufacturing reported the following information for 2016: $\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { October } \quad \text { November }\quad \text { December }$ $\text { Budgeted purchases } \quad \$ 240,000 \quad \$ 256,000 \quad\quad \$ 288,000$ Operating expenses are: Salaries $100000; Depreciation $40000; Rent $20000; Utilities $28000 $\bullet$ Operating expenses are paid during the month incurred. $\bullet$ Accounts payable is used only for inventory acquisitions. How much is the budgeted amount of cash to be paid for operating expenses in November?

A manufacturing overhead budget is not needed if the company develops a predeter-mined overhead rate to apply overhead.

The direct materials budget shows: Desired ending direct materials 48,000 pounds Total materials required 69,000 pounds Direct materials purchases 63,200 pounds The total direct materials needed for production is

If budgets are to be effective there must be

For better management acceptance the flow of input data for budgeting should begin with the

The beginning cash balance is $20000. Sales are forecasted at $700000 of which 80% will be on credit. 70% of credit sales are expected to be collected in the year of sale. Cash expenditures for the year are forecasted at $500000. Accounts receivable from previous accounting periods totaling $12000 will be collected in the current year. The company is required to make a $20000 loan payment and an annual interest payment on the last day of the year. The loan balance as of the beginning of the year is $120000 and the annual interest rate is 10%. Instructions How much will be reported as 'cash' on the budgeted balance sheet?

Beal Inc. provided the following information: $\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad \text { March } \quad \text { April } \quad \text { May }$ $\text { Projected merchandise purchases } \quad \$ 65.000 \quad \$ 7 5.000 \quad \$80.000$ $\bullet$ Beal pays 40% of merchandise purchases in the month purchased and 60% in the following month. $\bullet$ General operating expenses are budgeted to be $20000 per month of which depreciation is $2000 of this amount. Beal pays operating expenses in the month incurred. Instructions Calculate Beal's budgeted cash disbursements for May.

The budget is developed within the framework of a sales forecast.

In a production budget total required production units are the budgeted sales units plus

A company budgeted unit sales of 204000 units for January 2017 and 240000 units for February 2017. The company has a policy of having an inventory of units on hand at the end of each month equal to 30% of next month's budgeted unit sales. If there were 61200 units of inventory on hand on December 31 2016 how many units should be produced in January 2017 in order for the company to meet its goals?

The master budget for a service enterprise

In order to develop a budgeted balance sheet the previous year's balance sheet is needed.

Bear Inc. estimates its sales at 200000 units in the first quarter and that sales will increase by 20000 units each quarter over the year. They have and desire a 25% ending inventory of finished goods. Each unit sells for $35. 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. Cash collections for the third quarter are budgeted at

Teller Co. is planning to sell 900 boxes of ceramic tile with production estimated at 870 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Teller has 3900 pounds of clay mix in beginning inventory and wants to have 4500 pounds in ending inventory. What is the total amount to be budgeted for manufacturing overhead for the month?