Exam 9: The Master Budget

Fosnight Enterprises prepared the following sales budget: The expected gross profit rate is 30% and the inventory at the end of February was $10,000. Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold. What are the total purchases budgeted for April?

The financial budgets project the collection and payment of cash, as well as forecast the company's budgeted balance sheet.

All of the following are functions of the budget committee except

June sales were $5,000 while projected sales for July and August were $6,500 and $7,000, respectively. Sales are 35% cash and 65% credit. All credit sales are collected in the month following the sale. What are the expected collections for July?

Lough Company prepared the following purchases budget: All purchases are paid for as follows: 20% two months after purchase, 55% in the following month, and 25% in the month of purchase. What are the cash disbursements in October for September purchases?

Which of the following types of companies use an operating expense budget?

Lough Company prepared the following purchases budget: All purchases are paid for as follows: 20% two months after purchase, 55% in the following month, and 25% in the month of purchase. What are the cash disbursements in August for June purchases?

Willard's Department Store has budgeted cost of goods sold of $42,000 for its men's shorts in March. Management also wants to have $7,600 of men's shorts in inventory at the end of March to prepare for the summer season. Beginning inventory of men's shorts for March is expected to be $5,500. What dollar amount of men's shorts should be purchased in March?

Goliath Company prepared the following purchases budget: All purchases are paid for as follows: 30% in the month of purchase, 45% in the following month, and 25% two months after purchase. What are the cash disbursements in October for September purchases?

Strategic planning involves

Feeney Furniture prepared the following sales budget: Credit collections are 15% two months following the sale, 50% in the month following the sale, and 30% in the month of sale. The remaining 5% is expected to be uncollectible. What are the total cash collections in June?

Goliath Company prepared the following purchases budget: All purchases are paid for as follows: 30% in the month of purchase, 45% in the following month, and 25% two months after purchase. What are the total cash disbursements in August for the purchase of merchandise?

Merchandisers use a "cost of goods sold, inventory, and purchases" budget to calculate the amount of merchandise to purchase.

Einstein Company is preparing its cash budget for the upcoming month. The beginning cash balance for the month is expected to be $14,000. Budgeted cash receipts are $84,000, while budgeted cash disbursements are $72,000. Einstein Company wants to have an ending cash balance of $40,000. The excess (deficiency)of cash available over disbursements for the month would be

Desired ending inventory is 25% more than beginning inventory. If purchases total $160,000, which of the following statements is true regarding cost of goods sold (COGS)?

Roman Company is preparing its cash budget for the upcoming month. The budgeted beginning cash balance is expected to be $40,000. Budgeted cash receipts are $101,000, while budgeted cash disbursements are $123,000. Roman Company wants to have an ending cash balance of $45,000. How much would Roman Company need to borrow to achieve its desired ending cash balance?

Forty Winks Corporation manufactures night stands. The production budget shows that Forty Winks Corporation plans to produce 1,200 night stands in March and 1,050 night stands in April. Each night stand requires .50 direct labor hours in its production. Forty Winks Corporation has a direct labor rate of $12 per direct labor hour. What is the total combined direct labor cost that should be budgeted for March and April?

Budgets communicate financial plans throughout the company.

Which of the following alternatives reflects the proper order of preparing components of the master budget? 1. Financial budget 2) Operating budget 3) Capital expenditures budget

"Cash budget" is best defined by which of the following?