Question 1

What is a capital expenditures budget?

Accepted Answer

The capital expenditures budget shows th

Question 2

Lafayette Company's experience shows that 20% of its sales are for cash and 80% are on credit. An analysis of credit sales shows that 50% are collected in the month following the sale, 45% are collected in the second month, and 5% prove to be uncollectible. Calculate the following.

Accepted Answer

1) 20% * $535,000 = $107,000
(2) 45% * 8

Question 3

A company's history indicates that 20% of its sales are for cash and the rest are on credit. Collections on credit sales are 30% in the month of the sale, 50% in the next month, and 15% the following month. Projected sales for January, February, and March are $60,000, $85,000 and $95,000, respectively. The March expected cash receipts from all current and prior credit sales is:

Accepted Answer

A)  $80,750 
B)  $90,250 
C)  $57,000 
D)  $63,080 
E)  $64,000 
A)  $80,750 
B)  $90,250 
C)  $57,000 
D)  $63,080 
E)  $64,000

Question 4

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%.
- Zhang pays a sales manager a monthly salary of $3,000 and a commission of 2% of sales in dollars. Assume 30% of Zhang's sales are for cash. The remaining 70% are credit sales; these customers pay in the month following the sale. Compute the budgeted cash receipts for June.

Accepted Answer

A)  $196,000. 
B)  $280,000. 
C)  $201,880. 
D)  $285,880. 
E)  $282,520. 
A)  $196,000. 
B)  $280,000. 
C)  $201,880. 
D)  $285,880. 
E)  $282,520.

Question 5

A master budget refers to a company's sales budget that includes all of its segments or departments.

Accepted Answer

A) True 
 B)False

Question 6

A budget is best described as:

Accepted Answer

A)  An informal statement of company's future plans usually expressed in monetary terms. 
B)  The minimum acceptable performance level. 
C)  A master control device. 
D)  A formal statement of a company's future plans usually expressed in monetary terms. 
E)  The most crucial component of a company's evaluation process. 
A)  An informal statement of company's future plans usually expressed in monetary terms. 
B)  The minimum acceptable performance level. 
C)  A master control device. 
D)  A formal statement of a company's future plans usually expressed in monetary terms. 
E)  The most crucial component of a company's evaluation process.

Question 7

Long-term liability data for the budgeted balance sheet is derived from:

Accepted Answer

A)  The cash budget and capital expenditures budget. 
B)  The asset budget and debt budget. 
C)  The cash budget and budgeted income statement. 
D)  The cash budget and sales budget. 
E)  The sales budget and production budget. 
A)  The cash budget and capital expenditures budget. 
B)  The asset budget and debt budget. 
C)  The cash budget and budgeted income statement. 
D)  The cash budget and sales budget. 
E)  The sales budget and production budget.

Question 8

If budgeted beginning inventory is $8,300, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted purchases should be:

Accepted Answer

A)  $11,360 
B)  $1,100 
C)  $9,160 
D)  $1,960 
E)  $860 
A)  $11,360 
B)  $1,100 
C)  $9,160 
D)  $1,960 
E)  $860

Question 9

In preparing financial budgets:

Accepted Answer

A)  The budgeted income statement is usually prepared last. 
B)  The budgeted balance sheet is usually prepared last. 
C)  The budgeted income statement is usually not prepared. 
D)  The capital expenditures budget is usually prepared last. 
E)  The cash budget is usually not prepared. 
A)  The budgeted income statement is usually prepared last. 
B)  The budgeted balance sheet is usually prepared last. 
C)  The budgeted income statement is usually not prepared. 
D)  The capital expenditures budget is usually prepared last. 
E)  The cash budget is usually not prepared.

Question 10

Snap, Inc., provides the following data for the next four months:
 $$\begin{array} { | l | l | l | l } 
& \text { April } & \text { May } & \text { June } \
\hline \text { Budgeted production units } & 442 & 570 & 544 \
\hline \text { Ending Raw Materials Inventory ...... } & 663 \text { lbs. } & & \
\hline \text { Ending Finished Goods Inventory ...... } & 174 \text { Units } & &
\end{array}$$ Desired Ending Inventory:
Raw Materials = 30% of next month's production needs Pounds of raw material required for each finished Unit = 5 lbs.
Required:
Calculate the amount of purchases of raw materials in pounds for April and May.

Accepted Answer

The answer of Snap, Inc., provides the following data for...

Question 11

The sales budget for Modesto Corp. shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units.
- The desired ending inventory of B is 3,000 units. Budgeted purchases of Product A for the year would be:

Accepted Answer

A)  19,500 units. 
B)  20,400 units. 
C)  22,400 units. 
D)  12,200 units. 
E)  20,000 units. 
A)  19,500 units. 
B)  20,400 units. 
C)  22,400 units. 
D)  12,200 units. 
E)  20,000 units.

Question 12

The production budget is derived from the sales budget and the company's desired inventory levels.

Accepted Answer

A) True 
 B)False

Question 13

Use the following data to determine the company's cash disbursements for August and September:

Accepted Answer

None

Question 14

Aloan Co. provides the following sales forecast for the next three months: Sales units
 $$\begin{array} { r r r } 
\text { January } & \text { February } & \text { March } \
3.000 & 4,200 & 5,000
\end{array}$$ The company wants to end each month with ending finished goods inventory equal to 10% of the next month's sales. Finished goods inventory on December 31 is 300 units.
- The budgeted production units for January are:

Accepted Answer

A)  3,120 units. 
B)  2,880 units. 
C)  3,720 units. 
D)  3,420 units. 
E)  3,000 units. 
A)  3,120 units. 
B)  2,880 units. 
C)  3,720 units. 
D)  3,420 units. 
E)  3,000 units.

Question 15

Masterson Company's budgeted production calls for 56,000 liters in April and 52,000 liters in May of a key raw material that costs $1.85 per liter. Each month's ending raw materials inventory should equal 30% of the following month's budgeted materials. The April 1 inventory for this material is 16,800 liters. What is the budgeted materials purchases for April?

Accepted Answer

A)  $103,600. 
B)  $132,460. 
C)  $106,560. 
D)  $101,380. 
E)  $72,520. 
A)  $103,600. 
B)  $132,460. 
C)  $106,560. 
D)  $101,380. 
E)  $72,520.

Question 16

Webster Corporation is preparing a master budget for the first quarter of the year. The company budgets production of 2,680 units in January, 2,600 units in February and 2,740 units in March. Each unit requires 0.6 hours of direct labor. The direct labor rate is $12 per hour. Compute the budgeted direct labor cost for the first quarter budget.

Accepted Answer

A)  $57,744. 
B)  $56,160. 
C)  $48,120. 
D)  $96,240. 
E)  $93,600. 
A)  $57,744. 
B)  $56,160. 
C)  $48,120. 
D)  $96,240. 
E)  $93,600.

Question 17

Briefly describe a master budget and the sequence in which the individual budgets within the master budget are prepared.

Accepted Answer

The master budget is the comprehensive p

Question 18

Wichita Industries' sales are 10% for cash and 90% on credit. Credit sales are collected as follows: 30% in the month of sale, 50% in the next month, and 20% in the following month. On December 31, the accounts receivable balance includes $12,000 from November sales and $42,000 from December sales. Assume that total sales for January and February are budgeted to be $50,000 and $100,000, respectively. What are the expected cash receipts for February from current and past sales?

Accepted Answer

A)  $71,500. 
B)  $80,500. 
C)  $59,500. 
D)  $61,500. 
E)  $34,500. 
A)  $71,500. 
B)  $80,500. 
C)  $59,500. 
D)  $61,500. 
E)  $34,500.

Question 19

The merchandise purchases budget is the starting point for preparing the master budget of a merchandiser.

Accepted Answer

A) True 
 B)False

Question 20

A plan showing the planned sales units and the revenue to be derived from these sales, and is the usual starting point in the budgeting process, is called the:

Accepted Answer

A)  Business plan. 
B)  Sales budget. 
C)  Merchandise purchases budget. 
D)  Operating budget. 
E)  Income statement budget. 
A)  Business plan. 
B)  Sales budget. 
C)  Merchandise purchases budget. 
D)  Operating budget. 
E)  Income statement budget.

What is a capital expenditures budget?

Lafayette Company's experience shows that 20% of its sales are for cash and 80% are on credit. An analysis of credit sales shows that 50% are collected in the month following the sale, 45% are collected in the second month, and 5% prove to be uncollectible. Calculate the following.

A master budget refers to a company's sales budget that includes all of its segments or departments.

A budget is best described as:

Long-term liability data for the budgeted balance sheet is derived from:

If budgeted beginning inventory is $8,300, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted purchases should be:

In preparing financial budgets:

The production budget is derived from the sales budget and the company's desired inventory levels.

Use the following data to determine the company's cash disbursements for August and September:

Briefly describe a master budget and the sequence in which the individual budgets within the master budget are prepared.

The merchandise purchases budget is the starting point for preparing the master budget of a merchandiser.

A plan showing the planned sales units and the revenue to be derived from these sales, and is the usual starting point in the budgeting process, is called the:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Present and Future Values in Accounting

Activity-Based Costing

Filters

Exam 22: Master Budgets and Planning

What is a capital expenditures budget?

Lafayette Company's experience shows that 20% of its sales are for cash and 80% are on credit. An analysis of credit sales shows that 50% are collected in the month following the sale, 45% are collected in the second month, and 5% prove to be uncollectible. Calculate the following.

A master budget refers to a company's sales budget that includes all of its segments or departments.

A budget is best described as:

Long-term liability data for the budgeted balance sheet is derived from:

If budgeted beginning inventory is $8,300, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted purchases should be:

In preparing financial budgets:

The production budget is derived from the sales budget and the company's desired inventory levels.

Use the following data to determine the company's cash disbursements for August and September:

Briefly describe a master budget and the sequence in which the individual budgets within the master budget are prepared.

The merchandise purchases budget is the starting point for preparing the master budget of a merchandiser.

A plan showing the planned sales units and the revenue to be derived from these sales, and is the usual starting point in the budgeting process, is called the:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Present and Future Values in Accounting

Activity-Based Costing

Filters