Exam 22: Budgeting

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. -Estimated cash payments are planned reductions in cash from all of the following except

Match each phrase that follows with the term (a-e) it describes. -Shows expected results at only one activity level A)Static budget B)Flexible budget C)Master budget D)Sales budget E)Production budget

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 June for Cardinal Co. are as follows: The number of units expected to be manufactured in June 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 -The dollar amount of Material C used in production during the year 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: ​ -Southern Company is preparing a cash budget for April. The company has $12,000 cash at the beginning of April and anticipates $30,000 in cash receipts and $34,500 in cash disbursements during April. Southern Company has an agreement with its bank to maintain a minimum cash balance of $10,000. To maintain the required balance during April, the company must

Miller and Sons' static budget for 10,000 units of production includes $50,000 for direct materials, $44,000 for direct labor, variable utilities of $5,000, and supervisor salaries of $24,000. A flexible budget for 12,000 units of production would show

Match each phrase that follows with the term (a-e) it describes. -Begins by estimating the quantity of sales A)Static budget B)Flexible budget C)Master budget D)Sales budget E)Production budget

Planning for capital expenditures is necessary for all of the following reasons except

Match each phrase that follows with the term (a-e) it describes. -Comparing actual performance against budgeted goals A)Planning B)Directing C)Controlling D)Budget slack E)Goal conflict

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.​ -Budgeted production for product XXX during the month is

Match each phrase that follows with the term (a-f) it describes. -A plan showing the number of units to be produced each month A)Budget B)Capital expenditures budget C)Sales budget D)Production budget E)Cash budget F)Budgeted balance sheet

Good Eats Inc. manufactures flatware sets. The budgeted production is for 80,000 sets this year. Each set requires 2.5 hours to polish the material. If polishing labor costs $15 per hour, determine the direct labor cost budget for polishing for the year.

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 production for February would be

Ruff Jeans Company produces two different types of jeans: Simple Life and Fancy Life. The company sales budget estimates that 350,000 of the Simple Life jeans and 200,000 of the Fancy Life jeans will be sold during the current year. The production budget requires 353,500 units of Simple Life and 196,000 units of Fancy Life to be manufactured. The Simple Life jeans require 3 yards of denim material, a zipper, and 25 yards of thread. The Fancy Life jeans require 4.5 yards of denim material, a zipper, and 40 yards of thread. Each yard of denim material costs $3.25, the zippers cost $0.75 each, and the thread is $0.02 per yard. There is enough material to make 2,000 jeans of each type at the beginning of the year. The desired ending inventory is to have enough materials to manufacture 3,500 jeans of each type. Prepare a direct materials purchases budget.

-The number of pounds of Materials A and B required for August production is

-Production and sales estimates for April for Ibis Co. are as follows: The budgeted total sales for April is

Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business-September, October, and November-are $260,000, $375,000, and $400,000, respectively. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale.​ -The cash collections expected in September from accounts receivable are estimated to be

Star Co. was organized on August 1 of the current year. Projected sales for the next three months are as follows: The company expects to sell 50% of its merchandise for cash. Of the sales on account, 30% are expected to be collected in the month of the sale and the remainder in the following month.Prepare a schedule indicating cash collections for August, September, and October.

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 primary budget in a nonmanufacturing business is the _____ budget.

The production budget is the starting point for preparation of the direct labor cost budget.