Exam 6: Master Budget and Responsibility Accounting

The following information pertains to Amigo Corporation: -Cash is collected from customers in the following manner: Month of sale (2% cash discount)30% Month following sale50% Two months following sale15% Amount uncollectible5%-40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month. Required: a.Prepare a summary of cash collections for the 4th quarter. b.Prepare a summary of cash disbursements for the 4th quarter.

Freemore Company has the following sales budget for the last six months of 2018: Sales are immediately due, however the cash collection of sales, historically, has been as follows: 55% of sales collected in the month of sale, 35% of sales collected in the month following the sale, 7% of sales collected in the second month following the sale, and 3% of sales are uncollectible. Cash collections for September are ________.

Activity-based-costing analysis makes no distinction between ________.

The following information pertains to the January operating budget for Casey Corporation. -Budgeted sales for January $206,000 and February $109,000. -Collections for sales are 50% in the month of sale and 50% the next month. -Gross margin is 25% of sales. -Administrative costs are $19,000 each month. -Beginning accounts receivable is $29,000. -Beginning inventory is $14,000. -Beginning accounts payable is $74,000. (All from inventory purchases.) -Purchases are paid in full the following month. -Desired ending inventory is 20% of next month's cost of goods sold (COGS). At the end of January, budgeted ending inventory is ________.

Which of the following best describes a bill of materials?

Which of the following is a reason why top managers want lower-level managers to participate in the budgeting process?

Which of the following best describes a rolling budget?

Which of the following statements is true of budgets?

Variances that are calculated frequently and in a timely manner can provide early warnings to management so corrective action can be taken.

When performing a sensitivity analysis, if the selling price per unit is increased, then the ________.

The production cost budget identifies how each product is manufactured and specifies all the materials, the quantity of materials in each finished product, and the work centers where the operations will be performed.

Budgeting includes only the financial aspects of the plan and NOT any nonfinancial aspects such as the number of physical units manufactured or the hours that the direct laborers are expected to work.

The manufacturing labor budget depends on wage rates, production methods, and hiring plans.

The ________ is required to prepare the cash budget of an organization.

Perry Company has provided the following information: In addition, the gross profit rate is 40% and the desired inventory level is 30% of next month's cost of sales. Required: Prepare a purchases budget for April through June.

Sensitivity analysis helps managers evaluate risks ________.

Sherry and John Enterprises are using the kaizen approach to budgeting for 2018. The budgeted income statement for January 2018 is as follows: Under the kaizen approach, cost of goods sold and variable operating expenses are budgeted to decline by 1% per month. What is the budgeted operating income for March 2018?

Budgets incorporate managements goals and

The following information pertains to the January operating budget for Casey Corporation. -Budgeted sales for January $201,000 and February $101,000. -Collections for sales are 40% in the month of sale and 60% the next month. -Gross margin is 25% of sales. -Administrative costs are $13,000 each month. -Beginning accounts receivable is $25,000. -Beginning inventory is $17,000. -Beginning accounts payable is $73,000. (All from inventory purchases.) -Purchases are paid in full the following month. -Desired ending inventory is 25% of next month's cost of goods sold (COGS). For January, budgeted cash collections are ________.

Violet Sales Corp, reports the year-end information from 2018 as follows: Violet is developing the 2019 budget. In 2019 the company would like to increase selling prices by 3.5%, and as a result expects a decrease in sales volume of 14%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. Should Violet increase the selling price in 2019?