Exam 9: Budgetary Planning

The following information was taken from Southgate Industry's cash budget for the month of July: Beginning cash balance \ 480,000 Cash receipts 304,000 Cash disbursements 544,000 If the company has a policy of maintaining a minimum end of the month cash balance of $400,000, the amount the company would have to borrow is

A purchases budget is used instead of a production budget by

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

Long-range plans are used more as a review of progress toward long-term goals rather than an evaluation of specific results to be achieved.

What is the proper preparation sequencing of the following budgets? 1. Budgeted Balance Sheet 2. Sales Budget 3. Selling and Administrative Budget 4. Budgeted Income Statement

Comma Co. makes and sells widgets. The company is in the process of preparing its selling and administrative expense budget for the month. The following budget data are available: Item Variable Cost Per Unit Sold Monthly Fixed Cost Sales commissions \ 1 \ 10,000 Shipping \ 3 Advertising \ 4 Executive salaries \ 120,000 Depreciation on office equipment \ 4,000 Other \ 2 \ 6,000 Expenses are paid in the month incurred. If the company has budgeted to sell 80,000 widgets in October, how much is the total budgeted selling and administrative expenses for October?

A budget

The master budget for a service enterprise

Effective budgeting requires clearly defined lines of authority and responsibility.

The direct materials budget must be completed before the production budget because the quantity of materials available for production must be known.

A company budgeted unit sales of 204,000 units for January, 2020 and 240,000 units for February 2020. 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 61,200 units of inventory on hand on December 31, 2019, how many units should be produced in January, 2020 in order for the company to meet its goals?

A sales forecast

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

In many companies, responsibility for coordinating the preparation of the budget is assigned to

Hyde Corp.'s cash budget showed total available cash less cash disbursements. What does this amount equal?

Doe Manufacturing plans to sell 6,000 purple lawn chairs during May, 5,700 in June, and 6,000 during July. The company keeps 15% of the next month's sales as ending inventory. How many units should Doe produce during June?

If the required direct materials purchases are 24,000 pounds, the direct materials required for production is three times the direct materials purchases, and the beginning direct materials are three and a half times the direct materials purchases, what are the desired ending direct materials in pounds?

Correy Inc. 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 All sales are on credit. -Customer amounts on account are collected 50% in the month of sale and 50% in the following month. -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 cash will Correy receive during November?

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?

Haft Construction Company determines that 54,000 pounds of direct materials are needed for production in July. There are 3,200 pounds of direct materials on hand at July 1 and the desired ending inventory is 2,800 pounds. If the cost per unit of direct materials is $3, what is the budgeted total cost of direct materials purchases?