Exam 9: Profit Planning and Activity-Based Budgeting

Coleman,Inc.anticipates sales of 50,000 units,48,000 units,51,000 units and 50,000 units in July,August,September and October,respectively.Company policy is to maintain an ending finished-goods inventory equal to 40% of the following month's sales.On the basis of this information,how many units would the company plan to produce in September?

Yorkley Corporation plans to sell 41,000 units of its single product in March.The company has 2,800 units in its March 1 finished-goods inventory and anticipates having 2,400 completed units in inventory on March 31.On the basis of this information,how many units does Yorkley plan to produce during March?

List several factors that an organization might consider when developing a sales forecast.

Terry Pineno,new-accounts manager at East Bank of Clarion,has been asked to project how many new accounts she will open during 20x2.The local economy has been growing,and the bank has experienced a 10% increase in the number of new accounts over each of the past five years.In 20x1,the bank had 10,000 accounts. Pineno is paid a salary,plus a bonus of $20 for every new account above the budgeted amount.Thus,if the annual budget calls for 1,000 new accounts,and 1,080 new accounts are obtained,her bonus will be $1,600 (80 * $20). Pineno believes that the local economy will continue to grow at the same rate in 20x2 as it has in recent years.She decided to submit a projection of 700 new accounts for 20x2. Required: Your consulting firm has been hired by the bank president to make recommendations for improving the bank's operation.Write a memorandum to the president defining and explaining the negative consequences of budgetary slack.Also discuss the bank's bonus system for the new-accounts manager and how the bonus program tends to encourage budgetary slack.

Which of the following would depict the logical order for preparing (1)a production budget,(2)a cash budget,(3)a sales budget,and (4)a direct-labor budget?

Tiara Company has the following historical collection pattern for its credit sales: 70% collected in month of sale 15% collected in the first month after sale 10% collected in the second month after sale 4% collected in the third month after sale 1% uncollectible Budgeted credit sales for the last six months of the year follow. A.Calculate the estimated total cash collections during October. B.Calculate the estimated total cash collections during the year's fourth quarter.

Which of the following choices correctly denotes managerial functions that are commonly associated with budgeting?

The comprehensive set of budgets that serves as a company's overall financial plan is commonly known as:

An organization's budgets will often be prepared to cover:

A company's sales forecast would likely not consider general economic and industry trends.

The difference between the revenue or cost projection that a person provides,and a realistic estimate of the revenue or cost,is called: