Exam 9: The Master Budget

Timber Run Company has prepared the following forecasts of monthly sales: Timber Run Company has decided that the number of units in its inventory at the end of each month should equal 80% of next month's sales.The budgeted cost per unit is $10. How many units should be in January's beginning inventory?

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 total cash disbursements in August to account for the purchase of merchandise at Lough Company?

Cave Hardware's forecasted sales for April;May;June;and July are $200,000;$230,000;$190,000;and $240,000;respectively.Sales are 65% cash and 35% credit with all accounts receivables collected in the month following the sale.Cost of goods sold is 75% of sales and ending inventory is maintained at $60,000 plus 10% of the following month's cost of goods sold.All inventory purchases are paid 22% in the month of purchase and 78% in the following month. What is the balance of accounts payable on the June 30 budgeted balance sheet at Cave Hardware?

Romona Company expects its November sales to be 20% higher than its October sales of $165,000.All sales are on credit and are collected as follows: 35% in the month of the sale and 60% in the following month.Purchases were $110,000 in October and are expected to be $140,000 in November.Purchases are paid 40% in the month of purchase and 60% in the following month.The cash balance on November 1 is $13,500.The cash balance on November 30 will be

Which of the following should the organization use to initiate a budget?

All of the following budgets are prepared by service companies except

Managers may intentionally build slack into the budget

Budget committees include all of the following people except

Budget committee is a what-if technique that asks what a result will be if a predicted amount is not achieved or if an underlying assumption changes.

Two Brothers Moving prepared the following sales budget: Credit collections are 25% in the month of sale,60% in the month following the sale,and 10% two months following the sale.The remaining 5% is expected to be uncollectible. What are the total cash collections in June at Two Brothers Moving?

A combined cash budget includes all of the following except

Carlton Cookie Company produces a hand-processed gourmet cookie that is made with organic sugar.Five (5)pounds of organic sugar are required per batch of gourmet cookies.The organic sugar costs $2.40 per pound.The company needs to have 20% of the following month's production needs of organic sugar in ending inventory so it is on hand to start each month.A total of 120 pounds of organic sugar are expected to be on hand on April 1. 1.Budgeted production of the gourmet cookies for the first four months of the upcoming year is as follows: Required: Prepare a direct materials budget for organic sugar for each of the months in the second quarter and for the second quarter in total.Include both the quantity of sugar to be purchased and the cost of the purchases in each month.

For Dubinsky Company,experience has shown that payment for the credit sales is received as follows: 10% in the month of sale,65% in the first month after sale,20% in the second month after sale,and 5% uncollectible.Dubinsky Company has budgeted the following credit sales during the last four months of the year: September,$20,000;October,$24,000;November $22,000;December,$28,000.How much cash can Dubinsky Company expect to collect in November as a result of credit sales?

Rubino Corporation desires a December 31 ending inventory of 900 units.Budgeted sales for December are 2,650 units.The November 30 inventory was 850 units.What are budgeted purchases in units?

Strategic planning is beneficial because the organization can

Victoria Corporation manufactures quality vases.Budgeted sales and production data for the vases are as follows: The ending inventory for each month should be equal to 20% of the next month's production needs.Each vase requires one pound of clay in its manufacture.Victoria Corporation has a policy that the inventory of clay at the end of each month needs to be equal to 20% of the production needs for the following month.At the beginning of January,480 pounds of clay were in inventory.How many pounds of clay would Victoria Corporation need to purchase in February (Month 2?

Which of the following is an advantage of the budgeting process?

The financial budget that a manager prepares at a manufacturing company is different compared to the financial budget that a manager prepares at a merchandising and a service company.

Totz Company produces jump ropes.Totz Company has the following sales projections for the upcoming year: Inventory at the beginning of the year was 4,200 jump ropes.Totz Company wants to have 20% of the next quarter's sales in units on hand at the end of each quarter.How many jump ropes should Totz Company produce during the first quarter?

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 Forty Winks Corporation should budget in March and April?