Exam 22: Budgeting

Goal conflict can be avoided if budget goals are carefully designed for consistency across all areas of the organization.

The operating budgets are used to prepare the budgeted income statement.

Match each phrase that follows with the term (a-f) it describes. -A plan that shows the expected cash receipts (inflows) and payments (outflows) during the budget period, including receipts from loans needed to maintain a minimum cash balance and repayments of such loans A)Budget B)Capital expenditures budget C)Sales budget D)Production budget E)Cash budget F)Budgeted balance sheet

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 November from accounts receivable are projected to be

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

Future Technologies projected sales of 35,000 computers for this year. The estimated January 1 inventory is 3,000 units, and the desired December 31 inventory is 9,000 units. What is the budgeted production (in units) for the year?

A variant of fiscal-year budgeting whereby a 12-month projection into the future is maintained at all times is termed _____ budgeting.

Supervisor salaries and indirect factory wages would normally appear in the direct labor cost budget.

The master budget is an integrated set of budgets that tie together a company's operating, financing and investing activities into an integrated plan for the coming year.

Why is the sales budget usually prepared first?

Match each phrase that follows with the term (a-e) it describes. -Estimates the number of units to be manufactured to meet budgeted sales and desired inventory levels A)Static budget B)Flexible budget C)Master budget D)Sales budget E)Production budget

Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $250,000, $320,000, and $410,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale and 30% in the month following the sale.​ -Fashion Jeans, Inc., sells two lines of jeans: Simple Life and Fancy Life. Simple Life sells for $85, and Fancy Life sells for $100. The company sells all of its jeans on credit and estimates that 60% is collected in the month of the sale, 35% is collected in the following month, and the rest is considered to be uncollectible. The estimated sales for Simple are: January, 20,000 pairs of jeans; February, 27,500 pairs of jeans; and March, 25,000 pairs of jeans. The estimated sales for Fancy are: January, 18,000 pairs of jeans; February, 19,000 pairs of jeans; and March, 20,500 pairs of jeans. The expected cash receipts for the month of March is

Below is budgeted production and sales information for Bluebird Company for the month of December. The unit selling price for Product XXX is $5 and for Product ZZZ is $14.​ -Budgeted production for Product ZZZ during the month is

A budget procedure that provides for the maintenance at all times of a 12-month projection into the future is called continuous budgeting.

Jase Manufacturing Co.'s static budget at 10,000 units of production includes $40,000 for direct labor and $4,000 for electric power. Total fixed costs are $24,000. At 12,000 units of production, a flexible budget would show

Big Wheel, Inc., collects 25% of its sales on account in the month of the sale and 75% in the month following the sale. Sales on account are budgeted to be $225,000 for March and $250,000 for April. What are the budgeted cash receipts from sales on account for April?

When a manager seeks to achieve personal departmental objectives that may work to the detriment of the overall firm, the manager is experiencing

Flexible budgeting builds the effect of changes in level of activity into the budget system.

The capital expenditures budget summarizes plans for acquiring fixed assets.

Doran Technologies produces a single product. Expected manufacturing costs are as follows: Estimate manufacturing costs for production levels of 25,000 units, 30,000 units, and 35,000 units per month.