Exam 18: Budgeting and Control

Larry's Custom Bird Cages has budgeted unit sales for the first quarter of the year as follows: Larry wishes to have 20% of the next month's sales in ending inventory. If the January 1 beginning inventory consisted of 74 units, budgeted purchases for February would be:

Which of the following is a characteristic of good personal budgeters?

Exhibit 18-3 Thorne Chemicals makes cleaning solution. The following information is available on December 1, 2011: -Refer to Exhibit 18-3. Given the information above, how many units of raw material Y should be purchased during December?

Exhibit 18-8 Cheroke Company had an accounts receivable balance of $60,000 at December 31, 2011. Projected sales for the first three months of 2012 are: All sales are credit sales. Cheroke Company usually collects 40% of its sales during the month of sale, 50% in the month following the sale, and 10% in the second month following the sale. -Refer to Exhibit 18-8. Given the information above, cash collections during March should be:

Which of the following budgets are the same for both a manufacturing firm and a merchandising firm?

Which of the following serve as a basis for key management decisions?

Which budget supplies information for all manufacturing cost budgets?

Merrill & Merrill is planning for tax season (February, March, April). Merrill & Merrill earns all of its revenue through 1040 preparation and generally charges $1,000 per tax return. The following information has been gathered about Merrill & Merrill: Prepare revenue budgets, supplies budgets, wages and salaries budgets, and overhead budgets for the months of February, March, and April (this year is not leap year).

Which of the following is LEAST likely to be affected if actual June production is less than budgeted June production?

Credit sales are $92,000 in June and $80,500 in July; 80% are collected in the month of sale and 20% collected in the following month. Total July collections are:

In preparing the master budget, which of the following is created first?

The following information is available for Eastham Company: Expected sales volume: Prepare sales budgets and production budgets for July, August and September. The desired finished goods inventory every month is 20% of the next month's sales.

Which of the following is NOT an internal factor affecting sales?

Exhibit 18-5 Dr. Gatten began practicing dentistry on January 1, 2011. During January she served 250 patients who had their teeth examined and cleaned. The following information is known in relation to each patient visit: -Refer to Exhibit 18-5. Given the information above, total wages and salaries expense for January would be:

The flexible budget:

The accuracy of the sales forecast is usually dependent upon all the following EXCEPT:

Given the following budgets, which would be prepared first when completing the master budget?

The Storm Meadows Resort is preparing a cash budget for March 2011. Management has collected the following information: Prepare a cash budget for March 2011.

Top management's broad, long-range goals are found in:

The section of a cash budget that identifies amounts that must be borrowed is called the: