Exam 22: Master Budgets and Planning

A sporting goods store budgeted August purchases of ski jackets at $140,000.The store had ski jackets costing $12,000 in its inventory at the beginning of August; and to cover part of anticipated September sales,they expect to have $25,000 of ski jackets in inventory at the end of the month of August.What is the budgeted cost of goods sold for August?

Grafton sells a product for $700.Unit sales for May were 400 and a 3% growth in unit sales is forecasted for each month.Grafton pays a sales manager a monthly salary of $3,000 and a commission of 2% of sales in dollars.Compute the projected selling expense to be reported on the selling expense budget for the manager for month ended June 30.

Harold's expects its September sales to be 20% higher than its August sales of $150,000.Purchases were $100,000 in August and are expected to be $120,000 in September.All sales are on credit and are collected as follows: 30% in the month of the sale and 70% in the following month.Merchandise purchases are paid as follows: 25% in the month of purchase and 75% in the following month.The beginning cash balance on September 1 is $7,500.The ending cash balance on September 30 would be:

___________________________ is a budget system based on expected activities and their levels that enables management to plan for resources required to perform the activities.

Production budgets should always show both budgeted units of product and costs.

Which of the following budgets is not an operating budget?

Larger,more complex organizations usually require a longer time to prepare their budgets than smaller organizations because of the considerable effort to coordinate the different units within the business.

A sporting goods store purchased $7,000 of ski boots in October.The store had $3,000 of ski boots in inventory at the beginning of October,and expects to have $2,000 of ski boots in inventory at the end of October to cover part of anticipated November sales.What is the budgeted cost of goods sold for October?

A company's history indicates that 20% of its sales are for cash and the rest are on credit.Collections on credit sales are 30% in the month of the sale,50% in the next month,and 15% the following month.Projected sales for January,February,and March are $60,000,$85,000 and $95,000,respectively.The March expected cash receipts from all current and prior credit sales is:

A plan that reports the units or costs of merchandise to be purchased by a merchandising company during the budget period is called a:

A plan that states the number of units to be manufactured during each future period covered by the budget,based on the budgeted sales for the period and the levels of inventory needed to support future sales,is the:

The master budget is a small component of the comprehensive budget.

What are rolling budgets? Why are rolling budgets prepared?

The ______________________________ shows the budgeted costs for direct materials,direct labor,and overhead,based on the budgeted production volume from the production budget.

Clic,Inc.,provides the following data for the next four months: Desired Ending Inventory: Raw Materials = 30% of next month's production needs Finished Goods = 20% of next month's sales Pounds of raw material required for each finished Unit = 5 lbs. Required: Calculate the amount of purchases of raw materials in pounds for April and May.

Budgeting is an informal plan for future business activities.

Which of the following statements about budgeting is false?

Grafton budgets production of 300 units in June and 310 units in July.Each unit requires 1.5 hours of direct labor.The direct labor rate if $14 per hour.The indirect labor rate is $21.00 per hour.Compute the budgeted direct labor cost for July.

If budgeted beginning inventory is $8,300,budgeted ending inventory is $9,400,and budgeted cost of goods sold is $10,260,budgeted purchases should be:

A quantity of merchandise or materials over the minimum needed that reduces the risk of running short is called: