Exam 9: The Master Budget

Ted's Graduation Store sells graduation supplies to students through the college bookstore.The bank charges Ted's Graduation Store 3.25% on the total credit card sales each day to settle the credit card transactions.The college bookstore reported that consumers purchased $420 in credit card purchases.The managerial accountant needs to update the sales budget,the operating expenses budget,and the cash collections budget to account for the credit sales.What amount should the managerial accountant use to complete the sales budget,the operating expenses budget,and the cash collections budget? In which month should the managerial accountant show this data? What should the managerial accountant consider when updating the master budget?

Which of the following is a potential disadvantage of participative budgeting?

Which of the following budgets or financial statements is part of the operating budget?

June sales were $6,000 while projected sales for July and August were $8,500 and $7,000,respectively.All credit sales are collected in the month following the sale.Sales are 75% credit and 25% cash.What are the total expected collections for July?

List and describe three reasons why a company and its managers could benefit from the use of budgeting.

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

Which of the following is an example of a financial budget?

Thomas Corporation recorded sales of $200,000 during March.Management expects sales to increase 5% in April,another 2% in May,and another 10% in June.Cost of goods sold is expected to be 80% of sales.What is the budgeted gross profit for June?

The financial budget projects the collection and payment,of cash,and the forecast of the company's budgeted balance sheet.

Beloved Baby Company manufactures and sells children's strollers.Each stroller requires eight screws.For September,Beloved Baby Company will begin September with 380 screws in its beginning inventory.Beloved Baby Company has budgeted stroller sales of 530 strollers,while 570 strollers are scheduled to be produced.How many screws should Beloved Baby Company purchase in September?

The cash budget is prepared before the operating budget.

"The comprehensive budget" is best described by which of the following terms?

The cash budget helps managers determine whether or not the company requires financing in a given month.

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 October to account for the purchase of merchandise at Lough Company?

The sales budget must be prepared after every other component of the operating budget.

Hewitt Company expects cash sales for July of $15,000,and a 22% monthly increase during August and September.Credit sales of $10,000 in July should be followed by 30% increases during August and September.What are budgeted cash sales and budgeted credit sales for September respectively?

Mockingbird Company expects to sell 5,200 bird perches in January and 9,500 in February for $3 each.What will be the total sales revenue reflected in the sales budget for those months?

All of the following budgets are prepared by merchandising companies except

Merchandising companies prepare which of the following budgets?

Feeney Furniture prepared the following sales budget: Credit collections are 15% two months following the sale,50% in the month following the sale,and 30% in the month of sale.The remaining 5% is expected to be uncollectible. What are the total cash collections in June at Feeney Furniture?