Exam 22: Master Budgets and Planning

Zhang Industries sells a product for $700. Unit sales for May were 400 and each month's sales are expected to exceed the prior month's results by 3%. -Compute the total sales dollars to be reported on the sales budget for month ended June 30.

The master budgeting process typically begins with the sales budget and ends with a cash budget and:

The sales budget comes from a careful analysis of forecasted economic and market conditions, business capacity, and advertising plans.

The budgeted balance sheet and income statement are normally completed after preparation of operating and capital expenditure budgets.

A July sales forecast projects that 6,000 units are going to be sold at a price of $10.50 per unit. The management forecasts 2% growth in sales each month. -Total August sales are anticipated to be:

A quantity of inventory that provides protection against lost sales caused by unfulfilled demands from customers is called:

The following information is available for Jergenson Company: a. The Cash Budget for March shows a bank loan of $10,000 and an ending cash balance of $48,000. b. The Sales Budget for March indicates sales of $120,000. Accounts receivable is expected to be 70% of the current-month sales. c. The Merchandise Purchases Budget indicates that $90,000 in merchandise will be purchased in March on account and ending inventory for March is predicted to be 600 units @ $35. Purchases on account are paid 100% in the month following the purchase. d. The Budgeted Income Statement shows a net income of $48,000 and $21,000 in income tax expense for the quarter ended March 31. Accrued taxes will be paid in April. e. The Balance Sheet for February shows equipment of $77,000 with accumulated depreciation of $28,000, common stock of $25,000 and retained earnings of $8,000. There are no changes budgeted in the equipment or common stock accounts. Prepare a budgeted balance sheet for March.

The sales budget is derived from the production budget.

The master budget includes individual budgets for sales, production or purchases, various expenses, capital expenditures, and cash.

To determine the production budget for an accounting period, consideration is given to all of the following except:

Assuming a bottom-up process of budget development, which of the following should be initially responsible for developing sales estimates?

A ________ is a continuously revised budget that adds future months or quarters to replace months or quarters that have lapsed.

A department store has budgeted cost of goods sold for March of $60,000 for its women's shorts. Management wants to have $12,000 of shorts in inventory at the end of the month to prepare for the summer season. Beginning inventory in March was $8,000. What dollar amount of shorts should be purchased to meet the above plans?

Continuous budgeting is the practice of revising the entire set of budgets for the periods remaining and adding new budgets to replace those for the periods that have elapsed.

A July sales forecast projects that 6,000 units are going to be sold at a price of $10.50 per unit. The management forecasts 2% growth in sales each month - Total July sales are anticipated to be:

The practice of preparing budgets for each of several future periods and revising those budgets as each period is completed, adding a new budget each period so that the budgets always cover the same number of future periods, is called:

Bengal Co. provides the following sales forecast for the next three months: Sales units July August September 5,000 5,700 5,560 The company wants to end each month with ending finished goods inventory equal to 25% of the next month's sales. Finished goods inventory on June 30 is 1,250 units. -The budgeted production units for July are:

Which of the following is not a result of following a well-designed budgeting process?

A plan that lists the types and amounts of operating expenses expected that are not included in the selling expenses budget is a:

The Gardner Company expects sales for October of $248,000. Experience suggests that 45% of sales are for cash and 55% are on credit. The company collects 50% of its credit sales in the month of sale and 50% in the month following sale. Budgeted Accounts Receivable on September 30 is $67,000. What is the amount of cash expected to be collected in October?