Exam 18: Budgeting and Control

A budget committee includes:

Patricia's Piano Palace has budgeted piano sales for the fourth quarter of the year as follows: Larry wishes to have 20% of the next month's sales in ending inventory. If the September 1 beginning inventory consisted of 7 pianos, budgeted purchases for October would be:

The Mt. Airy Bed and Breakfast is planning for the summer tourist season and needs to prepare a flexible budget. The accountant has accumulated the following information: Prepare a flexible budget showing expected total costs for 200, 300, and 400 guests.

Highland Corporation is a high-speed Internet service provider that will open business January 1. Highland has enough band-width to potentially have 2,000 subscriptions each month at a cost of $50 per subscription. Highland expects that during January, the band-width will run at only 30% capacity. Highland plans to collect payment for each subscription at the beginning of each month. Given this information, how much revenue does Highland expect to earn during January?

How much cash will be needed to pay the following general and administrative expenses?

Exhibit 18-1 Elsie's Dairy produces various types of cheese. The following resources are used to make five pounds of cheddar cheese: -Refer to Exhibit 18-1. Based on the information above, what is the cost of producing one pound of cheese?

Exhibit 18-10 Streamer Company sells float-tubes for recreational fly-fishing. A review of the company's historical operations shows that gross margin consistently averages 40% of sales. Company guidelines indicate that ending inventory at the end of any quarter should always be 25% of the next quarter's budgeted cost of goods sold. The expected sales for Streamer's next four quarters are shown below. -Refer to Exhibit 18-10. If Streamer prepares a pro-forma income statement for the third quarter, what amount would be shown for inventory available for sale?

The following information is available for Alastair Company, a merchandising firm: Expected sales volume: Prepare sales budgets and purchases budgets for October, November, and December. The desired finished goods inventory every month is 30% of the next month's sales.

Michele has a salary of $56,000 per year. Michele estimates her living expenses are approximately as follows: Prepare Michele's budget for the year.

Which of the following budgets is based on the expected sales volume and the desired ending inventory of finished goods and is adjusted for the expected beginning inventory of finished goods?

Blake Company has $15,000 cash at the beginning of June and anticipates $50,000 in cash receipts and $34,500 in cash disbursements. Blake Company requires a minimum cash balance of $10,000 and maintains no more than $20,000 on hand. Any excess cash over the maximum is used to pay down debts. The firm has an agreement with its bank to borrow as needed or repay loans as funds become available. As of May 31, the company owes $15,000 to the bank. The balance of the loan on June 30 will be:

Johnson Electric plans to sell 125 boat motors during March. If it currently has 10 motors on hand and must maintain an inventory of 25, how many motors must the firm make during March?

A line of credit with a bank enables a company to:

Which of the following is NOT an uncontrollable external factor affecting sales?

The budgeted product cost sheet accumulates costs for all of the following EXCEPT:

A budget that allows for comparisons of actual and budgeted amounts at varying activity levels is:

Theodore's Musical Toys makes xylophones. Each xylophone takes 3 labor hours to make at a rate of $10.00 per hour. What is the budgeted production of xylophones if the budgeted direct labor cost for July is $16,200?

The master budgeting process is part of:

Exhibit 18-4 Playtime Toys began operations on January 1, 2011. During January it produced 2,000 toys and sold 1,850 toys. The following are needed to make 1 toy: Manufacturing overhead is applied at a rate of $4 per direct labor hour. -Refer to Exhibit 18-4. Given the information above, the cost of goods available for sale for January would be:

Which of the following types of budgeting procedures is the most effective for measuring performance?