Question 1

The production budget shows that expected unit sales are 48000. The total required units are 54000. What are the required production units?

Accepted Answer

A)  6000 
B)  9000 
C)  12000 
D)  Cannot be determined from the data provided. 
A)  6000 
B)  9000 
C)  12000 
D)  Cannot be determined from the data provided.

Question 2

Lark Corp.'s direct materials budget shows total cost of direct materials purchases for January $250000 February $300000 and March $350000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for March are

Accepted Answer

A)  $330000. 
B)  $320000. 
C)  $300000. 
D)  $260000. 
A)  $330000. 
B)  $320000. 
C)  $300000. 
D)  $260000.

Question 3

The direct materials budget contains both quantity and cost data.

Accepted Answer

A) True 
 B)False

Question 4

The budget that is often considered to be the most important financial budget is the

Accepted Answer

A)  cash budget. 
B)  capital expenditure budget. 
C)  budgeted income statement. 
D)  budgeted balance sheet. 
A)  cash budget. 
B)  capital expenditure budget. 
C)  budgeted income statement. 
D)  budgeted balance sheet.

Question 5

The budget should have the support of _________________ and should be an important basis for _________________________ by comparing actual results to expected results.

Accepted Answer

top manage

Question 6

The budget itself and the administration of the budget are entirely accounting responsibilities.

Accepted Answer

A) True 
 B)False

Question 7

Astor Manufacturing has the following budgeted sales: January $120000 February $180000 and March $150000. 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 March are:

Accepted Answer

A)  $168000. 
B)  $159000. 
C)  $157500. 
D)  $150000. 
A)  $168000. 
B)  $159000. 
C)  $157500. 
D)  $150000.

Question 8

A company has budgeted direct materials purchases of $300000 in July and $480000 in August. Past experience indicates that the company pays for 70% of its purchases in the month of purchase and the remaining 30% in the next month. During August the following items were budgeted: $$\begin{array} { l r } 
\text { Wages Expense } & \$ 150,000 \
\text { Purchase of office equipment } & 72,000 \
\text { Selling and Administrative Expenses } & 48,000 \
\text { Depreciation Expense } & 36,000
\end{array}$$ The budgeted cash disbursements for August are

Accepted Answer

A)  $648000. 
B)  $426000. 
C)  $696000. 
D)  $732000. 
A)  $648000. 
B)  $426000. 
C)  $696000. 
D)  $732000.

Question 9

Correy Company reported the following information for 2016:$\begin{array}{llll}
&\text { October }&\text { November } & \text { December }\
\text { Budgeted sales } & \$ 460,000 & \$ 440,000 & \$ 540,000 \
\text { Budgeted purchases } & \$ 240,000 & \$ 256,000 & \$ 288,000
\end{array}$ Cost of goods sold is 35% of sales.
$\bullet$Correy purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month.
$\bullet$Accounts payable is used only for inventory acquisitions.
How much is the budgeted balance for Accounts Payable at October 31 2016?

Accepted Answer

A)  $96000 
B)  $144000 
C)  $204000 
D)  $102400 
A)  $96000 
B)  $144000 
C)  $204000 
D)  $102400

Question 10

Wynn Inc. manufactures beanies. The budgeted units to be produced and sold are below:
$\begin{array} { l c c } 
& \text { Expected Production } & \text { Expected Sales } \
\text { August } & 3,500 & 2,900 \
\text { September } & 2,800 & 3,900
\end{array}$
It takes 18 yards of yarn to produce a beanie. The company's policy is to maintain yarn at the end of each month equal to 5% of next month's production needs and to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated production needs. The cost of yarn is $0.20 a yard. At August 1 3150 yards of yarn were on hand.
Instructions
Compute the budgeted cost of purchases.

Accepted Answer

None

Question 11

A budget can be used as a basis for evaluating performance.

Accepted Answer

A) True 
 B)False

Question 12

Hagen Company's budgeted sales and direct materials purchases are as follows. $$\begin{array} { l c c } 
& \text { Budgeted Sales } & \text { Budgeted D.M. Purchases } \
\text { January } & \$ 300,000 & \$ 60,000 \
\text { February } & 330,000 & 70,000 \
\text { March } & 350,000 & 80,000
\end{array}$$ Hagen's sales are 40% cash and 60% credit. Credit sales are collected 10% in the month of sale 50% in the month following sale and 36% in the second month following sale; 4% are uncollectible. Hagen's purchases are 50% cash and 50% on account. Purchases on account are paid 40% in the month of purchase and 60% in the month following purchase.
Instructions
(a) Prepare a schedule of expected collections from customers for March.
(b) Prepare a schedule of expected payments for direct materials for March.

Accepted Answer

The answer of Hagen Company's budgeted sales and direct materials...

Question 13

A production budget should be prepared before the sales budget.

Accepted Answer

A) True 
 B)False

Question 14

Rudd Company has budgeted sales revenue as follows for the next 4 months: $$\begin{array} { l r } 
\text { February } & \$ 300,000 \
\text { March } & 240,000 \
\text { April } & 210,000 \
\text { May } & 330,000
\end{array}$$ Past experience indicates that 80% of sales each month are on credit and that collection of credit sales occurs as follows: 60% in the month of sale 35% in the month following the sale and 3% in the second month following the sale. The other 2% is uncollectible.
Instructions
Prepare a schedule which shows expected cash receipts from sales for the month of May.

Accepted Answer

The answer of Rudd Company has budgeted sales revenue as...

Question 15

Which one of the following is not needed in preparing a production budget?

Accepted Answer

A)  Budgeted unit sales 
B)  Budgeted raw materials 
C)  Beginning finished goods units 
D)  Ending finished goods units 
A)  Budgeted unit sales 
B)  Budgeted raw materials 
C)  Beginning finished goods units 
D)  Ending finished goods units

Question 16

Shep Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first quarter of 2016 the following data are developed: 1.$ \text {Sales: 20,000 units; unit selling price:}$$\quad $$\quad $$\$ 30$
2. 
$\begin{array}{ll}
\text {Variable costs per dollar of sales:}\
\text { Sales commissions } & 6 \% \
\text { Delivery expense } & 2 \% \
\text { Advertising } & 4 \%
\end{array}$
3. 
$\begin{array}{lr}
\text { Fixed costs per quarter:}\
\text { Sales salaries } & \$ 24,000 \
\text { Office salaries } & 19,000 \
\text { Depreciation } & 6,000 \
\text { Insurance } & 2,000 \
\text { Utilities } & 1,000
\end{array}$ Instructions
Prepare a selling and administrative expense budget for the first quarter of 2016.

Accepted Answer

None

Question 17

A budget can facilitate the coordination of activities among the segments of a large company.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A)  accounting department. 
B)  top management. 
C)  lower level of management. 
D)  budget committee. 
A)  accounting department. 
B)  top management. 
C)  lower level of management. 
D)  budget committee.

Question 19

In September 2016 the budget committee of Jason Company assembles the following data:
1. Expected Sales $$\begin{array} { l r } 
\text { October } & \$ 1,800,000 \
\text { November } & 1,700,000 \
\text { December } & 1,600,000
\end{array}$$ 
2. Cost of goods sold is expected to be 60% of sales.
3. Desired ending merchandise inventory is 20% of the next month's cost of goods sold.
4. The beginning inventory at October 1 will be the desired amount.
Instructions
Prepare the budgeted income statement for October through gross profit on sales including a cost of goods sold schedule.

Accepted Answer

The answer of In September 2016 the budget committee of...

Question 20

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

Accepted Answer

A)  Long range planning ↔ Strategies 
B)  Budgeting ↔ Short-term goals 
C)  Long-range planning ↔ 5 years 
D)  Budgeting ↔ Long-term goals 
A)  Long range planning ↔ Strategies 
B)  Budgeting ↔ Short-term goals 
C)  Long-range planning ↔ 5 years 
D)  Budgeting ↔ Long-term goals

The production budget shows that expected unit sales are 48000. The total required units are 54000. What are the required production units?

Lark Corp.'s direct materials budget shows total cost of direct materials purchases for January $250000 February $300000 and March $350000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for March are

The direct materials budget contains both quantity and cost data.

The budget that is often considered to be the most important financial budget is the

The budget should have the support of _ and should be an important basis for _________ by comparing actual results to expected results.

The budget itself and the administration of the budget are entirely accounting responsibilities.

Astor Manufacturing has the following budgeted sales: January $120000 February $180000 and March $150000. 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 March are:

A budget can be used as a basis for evaluating performance.

A production budget should be prepared before the sales budget.

Which one of the following is not needed in preparing a production budget?

A budget can facilitate the coordination of activities among the segments of a large company.

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

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

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Incremental Analysis and Capital Budgeting

Time Value of Money

Filters

Exam 23: Budgetary Planning

The production budget shows that expected unit sales are 48000. The total required units are 54000. What are the required production units?

Lark Corp.'s direct materials budget shows total cost of direct materials purchases for January $250000 February $300000 and March $350000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for March are

The direct materials budget contains both quantity and cost data.

The budget that is often considered to be the most important financial budget is the

The budget should have the support of _________________ and should be an important basis for _________________________ by comparing actual results to expected results.

The budget itself and the administration of the budget are entirely accounting responsibilities.

Astor Manufacturing has the following budgeted sales: January $120000 February $180000 and March $150000. 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 March are:

A budget can be used as a basis for evaluating performance.

A production budget should be prepared before the sales budget.

Which one of the following is not needed in preparing a production budget?

A budget can facilitate the coordination of activities among the segments of a large company.

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

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

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Incremental Analysis and Capital Budgeting

Time Value of Money

Filters

The budget should have the support of _ and should be an important basis for _________ by comparing actual results to expected results.