Exam 6: Budgeting

The cash budget presents the expected inflow and outflow of cash for a specified period of time.

The cash collections expected in October are

Why is the sales budget usually prepared first?

Principal components of a master budget include

Consulting the persons affected by a budget when it is prepared can provide an effective means of motivation and cooperation.

The task of preparing a budget should be the sole task of the most important department in an organization.

Match each phrase that follows with the term a-e it describes. -shows expected results at only one activity level

The budget procedure that requires all levels of management to start from zero in estimating sales, production, and other operating data is called zero-based budgeting.

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

Describe at least five benefits of budgeting.

Star Co.was organized on August 1 of the current year.Projected sales for the next three months are as follows: The company expects to sell 50% of its merchandise for cash.Of the sales on account, 30% are expected to be collected in the month of the sale and the remainder in the following month. Prepare a schedule indicating cash collections for August, September, and October.

Match each phrase that follows with the term a-e it describes. -occurs when employee self-interests are different from company goals

As of January 1 of the current year, the Gunner Company had accounts receivables of $50,000.The sales for January, February, and March were as follows: $120,000, $140,000, and $150,000, respectively.Of each month's sales, 20% are for cash.Of the remaining 80% the credit sales, 60% are collected in the month of sale, with the remaining 40% collected in the following month.What is the accounts receivable balance as of March 31?

Based on the following production and sales estimates for May, determine the number of units expected to be manufactured in May.

The master budget is an integrated set of budgets that tie together a company's operating, financing and investing activities into an integrated plan for the coming year.

A budget procedure that provides for the maintenance at all times of a twelve-month projection into the future is called continuous budgeting.

Good Night manufactures comforters.The estimated inventories on January 1 for finished goods, work in process, and materials were $51,000, $28,000, and $33,000, respectively.The desired inventories on December 31 for finished goods, work in process, and materials were $48,000, $35,000, and $29,000, respectively.Direct material purchases were $555,000.Direct labor was $252,000 for the year.Factory overhead was $176,000.Prepare a cost of goods sold budget for Good Night, Inc.

The budgetary unit of an organization which is led by a manager who has both the authority over and responsibility for the unit's performance is known as a

Laurie Inc.'s static budget for 10,000 units of production includes $60,000 for direct materials, $44,000 for direct labor, fixed utilities costs of $5,000, and supervisor salaries of $25,000.A flexible budget for 12,000 units of production would show

For February, sales revenue is $700,000; sales commissions are 5% of sales; the sales manager's salary is $96,000; advertising expenses are $90,000; shipping expenses total 2% of sales; and miscellaneous selling expenses are $2,500 plus 1/2 of 1% of sales.Total selling expenses for the month of February are