Exam 9: Budgetary Planning

The master budget consists of operating and financial budgets.

The following information is taken from the production budget for the first quarter: Beginning inventory in units 1,200 Sales budgeted for the quarter 456,000 Production capacity in units 472,000 How many finished goods units should be produced during the quarter if the company desires 3,200 units available to start the next quarter?

Bear, Inc. estimates its sales at 200,000 units in the first quarter and that sales will increase by 20,000 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. Production in units for the third quarter should be budgeted at

A well-developed budget can operate and enforce itself.

An unrealistic budget is more likely to result when it

An overly optimistic sales budget may result in

Coordinating the preparation of the budget is the responsibility of the

Correy Company reported the following information for 2019: October November December Budgeted sales \ 460,000 \ 440,000 \ 540,000 Budgeted purchases \ 240,000 \ 256,000 \ 288,000 Cost of goods sold is 35% of sales. -Correy purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month. -Accounts payable is used only for inventory acquisitions. How much is the budgeted balance for Accounts Payable at October 31, 2019?

Budgeting and long-range planning are two terms that describe the same process.

Kam Department Store reported the following information for 2019: $\quad\quad\quad\quad\quad\quad\quad\quad\text { October\quad\quad November \quad December }$ $\text { Budgeted Sales } \quad \$ 1,240,000 \quad \$ 1,160,000 \quad \$ 1,440,000$ All sales are on credit. -Customer amounts on account are collected 50% in the month of sale and 50% in the following month. How much cash will Kam receive in November?

A master budget consists of

Which of the following is not an operating budget?

A production budget should be prepared before the sales budget.

Which one of the following budgets would be prepared for a manufacturer but not for a merchandiser?

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

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

Lion Industries required production for June is 132,000 units. To make one unit of finished product, three pounds of direct material Z are required. Actual beginning and desired ending inventories of direct material Z are 300,000 and 330,000 pounds, respectively. How many pounds of direct material Z must be purchased?

A company has budgeted direct materials purchases of $300,000 in July and $480,000 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: Wages Expense \ 150,000 Purchase of office equipment 72,000 Selling and Administrative Expenses 48,000 Depreciation Expense 36,000 The budgeted cash disbursements for August are

Off-Line Co. has 9,000 units in beginning finished goods. The sales budget shows expected sales to be 36,000 units. If the production budget shows that 42,000 units are required for production, what was the desired ending finished goods?

Which one of the following is a problem resulting from a service company being overstaffed?