Exam 22: Budgeting

Below is budgeted production and sales information for Flushing Company for the month of December. The unit selling price for product XXX is $5 and for product ZZZ is $15.​ -For March, sales revenue is $1,000,000, sales commissions are 5% of sales, the sales manager's salary is $80,000, advertising expenses are $65,000, shipping expenses total 1% of sales, and miscellaneous selling expenses are $2,100 plus 1% of sales. Total selling expenses for the month of March are

Supervisor salaries, maintenance, and indirect factory wages would normally appear in the factory overhead cost budget.

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

Match each phrase that follows with the term (a-e) it describes. -Integrated set of operating and financial budgets for a period of time A)Static budget B)Flexible budget C)Master budget D)Sales budget E)Production budget

Production estimates for July for Starling Co. are as follows: For each unit produced, the direct materials requirements are as follows: Material A ($5 per lb.)3.0 lbs.Material B ($18 per lb.)0.5 lb.​ -The total direct materials purchases of Materials A and B (assuming no beginning or ending materials inventory) required for July production is

Next year's sales forecast shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12 per unit, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units. The desired ending inventory of Product B is 3,000 units. -The budget that summarizes future plans for the acquisition of fixed assets is the _____ budget.

-The total direct materials purchases (assuming no beginning or ending inventory of material) of Materials A and B required for August production is

Match each phrase that follows with the term (a-e) it describes. -Occurs when budgets are too loose A)Planning B)Directing C)Controlling D)Budget slack E)Goal conflict

Describe a master budget and the sequence in which the individual budgets within the master budget are prepared.

Cardinal Company has finished goods inventory of 55,000 units on January 1. Its projected sales for the next four months are: January, 200,000 units; February, 180,000 units; March, 210,000 units; and April, 230,000 units. Cardinal Company wishes to maintain a desired ending finished goods inventory of 20% of the following month's sales.​ -The budgeted units of inventory for March 31

Next year's sales forecast shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12 per unit, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units. The desired ending inventory of Product B is 3,000 units. -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 cost of goods manufactured is

A company is preparing its cash budget. Its cash balance on January 1 is $290,000, and it has a minimum cash requirement of $340,000. The following data have been provided: ​ -The amount of the deficiency or excess cash (after considering the minimum cash balance required) for January is a(n)

Cardinal Company has finished goods inventory of 55,000 units on January 1. Its projected sales for the next four months are: January, 200,000 units; February, 180,000 units; March, 210,000 units; and April, 230,000 units. Cardinal Company wishes to maintain a desired ending finished goods inventory of 20% of the following month's sales.​ -Willow Valley's April sales forecast projects that 7,000 units will sell at a price of $10.50 per unit. The desired ending inventory is 30% higher than the beginning inventory, which was 1,000 units. Budgeted production in April would be

-If the expected sales volume for the current period is 7,000 units, the desired ending inventory is 400 units, and the beginning inventory is 400 units, the number of units set forth in the production budget, representing total production for the current period, is

The primary difference between a static budget and a flexible budget is that a static budget

At the beginning of the period, the Assembly Department budgeted direct labor of $110,000, direct materials of $170,000, and fixed factory overhead of $28,000 for 8,000 hours of production. The department actually completed 10,000 hours of production. The appropriate total budget for the department, assuming it uses flexible budgeting, is

Mandy Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 98,000 units, and desired ending inventory is 80,000 units. The quantities of direct materials expected to be used for each unit of finished product are given below.​ Material A: 0.5 lb. per unit @ $0.60 per pound Material B: 1.0 lb. per unit @ $1.70 per pound Material C: 1.2 lbs. per unit @ $1.00 per pound -Production and sales estimates for May for Cardinal Co. are as follows: The number of units expected to be sold in May is

The cash budget is affected by the sales budget, the various budgets for manufacturing costs and operating expenses, and the capital expenditures budget.

Sleep Tight, Inc., manufactures bedding sets. The budgeted production is for 52,000 comforters this year. Each comforter requires 1.5 hours to cut and sew the material. The cost of cutting and sewing labor is $12.50 per hour. Determine the direct labor budget for this year.

-Production and sales estimates for April for Crane Co. are as follows: The number of units expected to be manufactured in April is