Question 1

Budgets are prepared in the Accounting Department and monitored by various department managers.

Accepted Answer

A) True 
 B)False  False

Question 2

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.

Accepted Answer

The answer of Sleep Tight, Inc. manufactures bedding sets. The...

Question 3

The budgeted volume of production is based on the sum of (1) the expected sales volume and (2) the desired ending inventory, less (3) the estimated beginning inventory.

Accepted Answer

A) True 
 B)False  True

Question 4

Part of the cash budget is based on information drawn from the capital expenditures budget.

Accepted Answer

A) True 
 B)False

Question 5

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. What is the appropriate total budget for the department, assuming it uses flexible budgeting?

Accepted Answer

A)  $288,000 
B)  $305,000 
C)  $350,000 
D)  $378,000 
A)  $288,000 
B)  $305,000 
C)  $350,000 
D)  $378,000

Question 6

When preparing the cash budget, all the following should be considered except

Accepted Answer

A)  cash receipts from customers 
B)  depreciation expense 
C)  cash payments to suppliers 
D)  cash payments for equipment 
A)  cash receipts from customers 
B)  depreciation expense 
C)  cash payments to suppliers 
D)  cash payments for equipment

Question 7

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

Accepted Answer

A)  $280,000 
B)  $316,400 
C)  $295,200 
D)  $276,500 
A)  $280,000 
B)  $316,400 
C)  $295,200 
D)  $276,500

Question 8

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

Accepted Answer

A)  498,000 units 
B)  502,000 units 
C)  534,000 units 
D)  566,000 units 
A)  498,000 units 
B)  502,000 units 
C)  534,000 units 
D)  566,000 units

Question 9

Match between columns
                        Premises: plans an important role for organizations in planning, directing, and controlling a company's future goals
occurs when employee self-interests are different from company goals
a plan that lists dollar amounts to be both spent on purchasing additional pant assets to carry out the budgeted business activities
shows expected results at only one activity level
integrated set of operating and financing budgets for a period of time
compares actual performance against budgeted goals
actions to achieve budgeted goals
shows expected results at several activity levels
estimates the number of units to be manufactured to meet sales and inventory levels
begins by estimating the quantity of sales
occurs when budgets are too loose
a plan showing the units of goods to be sold and the sales to be derived; usually the starting point in the budgeting process
an accounting report that presents predicted amounts of the company's assets, liabilities, and equity as of the end of the budget period
a plan that shows the expected cash inflows and outflows during the budget period, including receipts from loans needed to maintain a minimum cash balance and repayments of such loans
setting goals
a plan showing the number of units to be produced each month

Accepted Answer

The Answer of sales budget and budgeted balance sheet and is...

Question 10

Osprey Cycles, Inc. projected sales of 75,000 bicycles for the year. The estimated January 1 inventory is 5,000 units, and the desired December 31 inventory is 8,000 units. What is the budgeted production (in units) for the year?

Accepted Answer

The answer of Osprey Cycles, Inc. projected sales of 75,000...

Question 11

The first budget to be prepared is usually the sales budget.

Accepted Answer

A) True 
 B)False

Question 12

Once a static budget has been determined, it is changed regularly as the underlying activity changes.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Budgets are normally used only by profit-making businesses.

Accepted Answer

A) True 
 B)False

Question 15

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?

Accepted Answer

The answer of Big Wheel, Inc. collects 25% of its...

Question 16

The capital expenditures budget is part of the planned investing activities of a company.

Accepted Answer

A) True 
 B)False

Question 17

If budgeted beginning inventory is $8,000, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted production should be

Accepted Answer

A)  $1,400 
B)  $9,600 
C)  $11,660 
D)  $11,550 
A)  $1,400 
B)  $9,600 
C)  $11,660 
D)  $11,550

Question 18

The budgeted direct materials purchases is normally computed as the sum of (1) the materials for production and (2) the desired ending inventory.

Accepted Answer

A) True 
 B)False

Question 19

Production and sales estimates for April are as follows:   The budgeted total sales for April is

Accepted Answer

A)  $200,000 
B)  $230,000 
C)  $270,000 
D)  $250,000 
A)  $200,000 
B)  $230,000 
C)  $270,000 
D)  $250,000

Question 20

What is a cash budget?  How does management use a cash budget?

Accepted Answer

A cash budget shows expected cash inflow

Budgets are prepared in the Accounting Department and monitored by various department managers.

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.

The budgeted volume of production is based on the sum of (1) the expected sales volume and (2) the desired ending inventory, less (3) the estimated beginning inventory.

Part of the cash budget is based on information drawn from the capital expenditures budget.

When preparing the cash budget, all the following should be considered except

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

Osprey Cycles, Inc. projected sales of 75,000 bicycles for the year. The estimated January 1 inventory is 5,000 units, and the desired December 31 inventory is 8,000 units. What is the budgeted production (in units) for the year?

The first budget to be prepared is usually the sales budget.

Once a static budget has been determined, it is changed regularly as the underlying activity changes.

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

Budgets are normally used only by profit-making businesses.

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?

The capital expenditures budget is part of the planned investing activities of a company.

If budgeted beginning inventory is $8,000, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted production should be

The budgeted direct materials purchases is normally computed as the sum of (1) the materials for production and (2) the desired ending inventory.

Production and sales estimates for April are as follows: The budgeted total sales for April is

What is a cash budget? How does management use a cash budget?

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity Based Costing

Cost Volume Profit Analysis

Variable Costing for Management Analysis

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

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Exam 7: Budgeting

Budgets are prepared in the Accounting Department and monitored by various department managers.

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.

The budgeted volume of production is based on the sum of (1) the expected sales volume and (2) the desired ending inventory, less (3) the estimated beginning inventory.

Part of the cash budget is based on information drawn from the capital expenditures budget.

When preparing the cash budget, all the following should be considered except

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

Osprey Cycles, Inc. projected sales of 75,000 bicycles for the year. The estimated January 1 inventory is 5,000 units, and the desired December 31 inventory is 8,000 units. What is the budgeted production (in units) for the year?

The first budget to be prepared is usually the sales budget.

Once a static budget has been determined, it is changed regularly as the underlying activity changes.

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

Budgets are normally used only by profit-making businesses.

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?

The capital expenditures budget is part of the planned investing activities of a company.

If budgeted beginning inventory is $8,000, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted production should be

The budgeted direct materials purchases is normally computed as the sum of (1) the materials for production and (2) the desired ending inventory.

Production and sales estimates for April are as follows: The budgeted total sales for April is

What is a cash budget? How does management use a cash budget?

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity Based Costing

Cost Volume Profit Analysis

Variable Costing for Management Analysis

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

Filters