Exam 9: The Master Budget

"Combined cash budget" is best defined by which of the following?

Fosnight Enterprises prepared the following sales budget: The expected gross profit rate is 20% and the inventory at the end of February was $8000. 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?

Rubino Corporation desires a December 31 ending inventory of 1000 units. Budgeted sales for December are 3450 units. The November 30 inventory was 550 units. What are budgeted purchases in units?

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?

Service companies do not prepare a cost of goods sold, inventory, and purchases budget.

June sales were $1000 while projected sales for July and August were $8400 and $2000, respectively. All credit sales are collected in the month following the sale. Sales are 60% credit and 40% cash. What are the total expected collections for July?

The ________ budget is a component in a financial budget.

All of the following budgets are prepared by service companies except

Hewitt Company expects cash sales for July of $11,000, and a 19% monthly increase during August and September. Credit sales of $14,000 in July should be followed by 28% increases during August and September. What are budgeted cash sales and budgeted credit sales for September respectively?

Forty Winks Corporation manufactures night stands. The production budget shows that Forty Winks Corporation plans to produce 1800 night stands in March and 1400 night stands in April. Each night stand requires 0.50 direct labor hours in its production. Forty Winks Corporation has a direct labor rate of $19 per direct labor hour. What is the total combined direct labor cost that Forty Winks Corporation should budget in March and April?

Crafty Carpentry Company produces and sells a shelf for $25 each. The beginning inventory is 1200 shelves, and the desired ending inventory is 1700 shelves. If budgeted production is 12,000 shelves, what is the forecasted sales revenue from the shelves?

Bookworm Publishers publishes books and they have gathered the following data for the month of October: Bookworm Publishers requires an ending cash balance of at least $5,000 and can borrow from a line of credit in $1,000 increments. How much cash is available for October?

Sander Enterprises prepared the following sales budget: The expected gross profit rate is 10% and the inventory at the end of February was $6000. 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?

Two Brothers Moving prepared the following sales budget: Credit collections are 62% in the month of sale, 30% in the month following the sale, and 5% two months following the sale. The remaining 3% is expected to be uncollectible. What is the total cash received in April to account for the April sales at Two Brothers Moving?

The budgeted cash collections from credit customers generally only reflect sales made in the current month.

Speedy Runner makes running shoes and they have gathered the following data for the month of October: Speedy Runner requires an ending cash balance of at least $12,000 and can borrow from a line of credit in $1,000 increments. What is Speedy Runner's cash excess or cash deficiency at the end of October?

Cave Hardware's forecasted sales for April, May, June, and July are $190,000, $210,000, $180,000, and $230,000, respectively. Sales are 70% cash and 30% credit with all accounts receivables collected in the month following the sale. Cost of goods sold is 80% of sales and ending inventory is maintained at $35,000 plus 20% 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 are the budgeted cash payments in June to account for the inventory purchases at Cave Hardware?

The ________ budget is a component in a financial budget.

Most companies use ________ when the lower level management develops budgets each year.

Whistle Works manufacturers safety whistle keychains. They have the following information available to prepare their master budget: Whistle Works sells each whistle for $12. It takes .25 direct labor hours to produce each whistle at a cost of $15 per hour. How much will direct labor costs be in December?