Exam 8: The Master Budget

Beasley Company Beasley Company prepared a cash budget by quarters for the upcoming year.Missing data amounts are indicated with question marks or lower case letters;these lower case letters will be referred to in the questions that follow. Beasley requires a minimum balance of $10,000 to start a quarter. All data are in thousands. Beasley Corporation Cash Budget

	QTR 1	QTR 2	QTR 3	QTR 4
Cash balance, beginning	$16	$ e	$13	$10
Add collections from customers	a	70	67	80
Total cash available	?	?	80	90
Less disbursements:
Purchase of inventory	31	c	40	35
Operating expenses	25	22	?	15
Equipment purchases	10	14	19	0
Dividends	0	6	0	5
Total disbursements	66	?	f	55
Excess (deficiency) of cash available over disbursements	7	17	(2)	35
Financing:
Borrowings:	b	--	12	--
Repayments (including interest)	--	d	--	(12)
Total financing	?	?	12	(12)
Cash balance, ending	$10	$?	$10	$23
	====	====	====	====

Refer to Beasley Company.The collections from customers during the first quarter (item a)are:

A budget manual should include which of the following?

The budgeted cost of products to be sold in a future period would be found in the

Chronologically,the last part of the master budget to be prepared would be the

It is least likely that a production budget revision would cause a revision in the

A pro forma financial statement is

The cash budget ignores all

The amount of raw materials that must be purchased can be computed by the following formula: Beginning inventory + Materials required - Ending inventory.

When actual performance varies from the budgeted performance,managers will be more likely to revise future budgets if the variances were

Schmidt Corporation manufactures card tables.The company has a policy of maintaining a finished goods inventory equal to 40 percent of the next month's planned sales.Each card table requires 3 hours of labor.The budgeted labor rate for the coming year is $13 per hour.Planned sales for the months of April,May,and June are respectively 4,000;5,000;and 3,000 units.The budgeted direct labor cost for June for Schmidt Corporation is $136,500.What are budgeted sales for July for Schmidt Corporation?

A budget that is developed with little input from operating personnel is referred to as a(n)______________________________.

External factors that cause the achievement of company goals are the

A master budget contains which of the following? $\text {\underline{Sales} }$             $\text {\underline{ Production} }$                 $\text {\underline{Proforma statements} }$

Short-term planning designed to address a specific set of circumstances is referred to as ______________________________.

Beasley Company Beasley Company prepared a cash budget by quarters for the upcoming year.Missing data amounts are indicated with question marks or lower case letters;these lower case letters will be referred to in the questions that follow. Beasley requires a minimum balance of $10,000 to start a quarter. All data are in thousands. Beasley Corporation Cash Budget

	QTR 1	QTR 2	QTR 3	QTR 4
Cash balance, beginning	$16	$ e	$13	$10
Add collections from customers	a	70	67	80
Total cash available	?	?	80	90
Less disbursements:
Purchase of inventory	31	c	40	35
Operating expenses	25	22	?	15
Equipment purchases	10	14	19	0
Dividends	0	6	0	5
Total disbursements	66	?	f	55
Excess (deficiency) of cash available over disbursements	7	17	(2)	35
Financing:
Borrowings:	b	--	12	--
Repayments (including interest)	--	d	--	(12)
Total financing	?	?	12	(12)
Cash balance, ending	$10	$?	$10	$23
	====	====	====	====

Refer to Beasley Company.The cash disbursed for purchases during the second quarter (item c)is:

Tactical planning usually involves which level of management?

The document that results from the budgeting process is referred to as the ______________________________.

Long-range planning carried out by top management is referred to as ______________________________.

Bentonville Medical Center has provided you with the following budget information for July: Cash collections                        $\$ 918,00$ July 1 cash balance                    32,000 Cash disbursements                  $1.020 .400$ Bentonville has a policy of maintaining a minimum cash balance of $30,000 and borrows only in $1,000 increments.How much will Bentonville borrow in July?

Strategic planning is focused on long-range goals of five to ten years.