Exam 6: Budgeting

Magnolia, Inc.manufactures bedding sets.The budgeted production is for 55,000 comforters this year.Each comforter requires 7 yards of material.The estimated January 1 beginning inventory is 31,000 yards with the desired ending balance of 30,000 yards of material.If the material costs $4.00 per yard, determine the materials budget for the year.

A process whereby the effect of fluctuations in the level of activity is built into the budgeting system is referred to as flexible budgeting.

Match each phrase that follows with the term a-f it describes.. -a plan showing the units of goods to be sold and the sales to be derived; usually the starting point in the budgeting process

If the expected sales volume for the current period is 7,000 units, the desired ending inventory is 400 units, and the beginning inventory is 400 units, the number of units set forth in the production budget, representing total production for the current period, is

After the sales budget is prepared, the production budget is normally prepared next.

The cash payments for Finch Company expected in the month of June are

The sales budget is derived from the production budget.

Match each phrase that follows with the term a-f it describes.. -a plan that shows the expected cash inflows and outflows during the budget period, including receipts from loans needed to maintain a minimum cash balance and repayments of such loans

If budgeted beginning inventory is $8,000, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted production should be

Match each phrase that follows with the term a-e it describes. -estimates the number of units to be manufactured to meet sales and inventory levels

The first budget to be prepared is usually the cash budget.

What is a cash budget? How does management use a cash budget?

The cash budget summarizes future plans for acquisition of fixed assets.

In preparing flexible budgets, the first step is to identify the fixed and variable components of the various costs and expenses being budgeted.

Flexible budgeting requires all levels of management to start from zero and estimate sales, production, and other operating data as though operations were being started for the first time.

The budgeted volume of production is based on the sum of 1 the expected sales volume and 2 the desired ending inventory, less 3 the estimated beginning inventory.

Production and sales estimates for April are as follows: The budgeted total sales for April is

Future Technologies projected sales of 35,000 computers for this year.The estimated January 1 inventory is 3,000 units, and the desired December 31 inventory is 9,000 units.What is the budgeted production in units for the year?

Match each phrase that follows with the term a-f it describes.. -a plan showing the number of units to be produced each month

The budgeted direct materials purchases is based on the sum of 1 the materials needed for production and 2 the desired ending materials inventory, less 3 the estimated beginning materials inventory.