Exam 9: The Master Budget

Sally Scooters manufactures and sells scooters.Each scooter requires two rear view mirrors.For September,Sally Scooters has budgeted sales of 415 scooters,while 450 scooters are scheduled to be produced.Sally Scooters will begin September with 220 rear view mirrors in its beginning inventory.How many rear view wheels should Sally Scooters purchase for September?

Sander Enterprises prepared the following sales budget: The expected gross profit rate is 40% 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 May?

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 May?

Goddard's Department Store has budgeted cost of goods sold of $44,000 for its men's shorts in March.Management also wants to have $8,000 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?

Sam's Toys budgeted sales of $300,000 for the month of November and cost of goods sold equal to 80% of sales.Beginning inventory for November was $50,000 and ending inventory for November is estimated at $55,000.How much are the budgeted purchases for November?

Kennedy Enterprises has budgeted sales for the months of September and October at $120,000 and $150,000,respectively.Monthly sales are 70% credit and 30% cash.Of the credit sales,20% are collected in the month of sale and 80% are collected in the following month.What are the October cash collections from customers?

List the operating budgets in order of use and describe the purpose of each budget on the list below Describe the relationship between each budget.

Budgeting includes planning for ending inventory.

Sander Enterprises prepared the following sales budget: The expected gross profit rate is 40% 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 is the desired beginning inventory on June 1?

The capital expenditures budget is not a component of the operating budget.

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 August to account for the June purchases at Goliath Company?

Warshaw Company budgets payroll at $3,600 per month plus a percentage of monthly sales.The June operating expenses budget includes total payroll of $13,200 with budgeted sales of $160,000.Sales for July are budgeted at $180,000 while purchases of inventory for July are budgeted at $95,000.Depreciation and insurance for July are estimated at $1,000 and $600,respectively.Office and administrative expenses related to purchasing inventory are budgeted at 10% of purchases for the month.The purchase of $2,500 in equipment and $1,500 in furniture is expected in July. If the percentage of monthly sales used in budgeting payroll increases 25%,what would the total payroll budgeted for July be?

Strategic planning involves setting short-term goals that extend three to four months into the future.

Jasmine and Rosemary sell healthy spices to consumers at the county fair.Sally and Rosemary only accept credit card purchases and cash from consumers.On Saturday,they sold $350 in merchandise and all consumers used credit cards to purchase merchandise at the fair.The bank charges 1.75% on total credit charges each day to settle the credit charges on their business banking account.Compute the total charges the bank will charge Jasmine and Rosemary on their account.How much will the bank deposit into their account after all charges? How should Jasmine and Rosemary show the sale and fees in the sales budget,the operating expense budget,and the cash collections budget?

Merchandising companies prepare a manufacturing overhead 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 is the budgeted cost of goods sold for May?

Kotrick Company has beginning inventory of 15,000 units and expected sales of 23,000 units.If the desired ending inventory is 18,000 units,how many units should be produced?

Pristine Yards Manufacturing produces weed whackers.On March 31,Pristine Yards Manufacturing had 144 weed whackers in inventory.The company has a policy that the ending inventory in any month must be 12% of the following month's expected sales.Pristine Yards Manufacturing expects to sell the following number of weed whackers in each of the next four months: Required: Prepare a production budget for the second quarter,with a column for each month and for the quarter.

A cash collections budget focuses on the timing of cash receipts.

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 total expected collections for July?