Exam 6: Budgeting

The Tough Jeans Company produces two different styles of jeans, Working Life and Social Life.The company sales budget estimates that 400,000 of the Working Life jeans and 250,000 of the Social Life jeans will be sold during the year.The company begins with 9,000 pairs of Working Life and 18,000 pairs of Social Life.The company desires ending inventory of 7,500 of Working Life and 10,000 Social Life.Prepare a production budget for the year.

Willow Valley's April sales forecast projects that 7,000 units will sell at a price of $10.50 per unit.The desired ending inventory is 30% higher than the beginning inventory, which were 1,000 units.Budgeted production in April would be

If Division Inc.expects to sell 200,000 units in the current year, desires ending inventory of 24,000 units, and has 22,000 units on hand as of the beginning of the year, the budgeted volume of production for the year is 198,000 units.

Budgeting supports the planning process by encouraging all of the following activities except

Budgets are normally used only by profit-making businesses.

At the beginning of the period, the Assembly Department budgeted direct labor of $110,000, direct materials of $170,000, and fixed factory overhead of $28,000 for 8,000 hours of production.The department actually completed 10,000 hours of production.What is the appropriate total budget for the department, assuming it uses flexible budgeting?

The production budget is the starting point for preparation of the direct labor cost budget.

The capital expenditures budget details future plans for acquisition of fixed assets.

At the beginning of the period, the Cutting Department budgeted direct labor of $30,000 and supervisor salaries of $20,000 for 3,000 hours of production.The department actually completed 5,000 hours of production.Determine the budget for the department assuming that it uses flexible budgeting.

Diamond Company manufactures two models of cassette recorders, VCH and MTV.Based on the following production data for April, prepare a production budget.

Big Wheel, Inc.collects 25% of its sales on account in the month of the sale and 75% in the month following the sale.Sales on account are budgeted to be $225,000 for March and $250,000 for April.What are the budgeted cash receipts from sales on account for April?

Goal conflict can be avoided if budget goals are carefully designed for consistency across all areas of the organization.

When preparing the cash budget, all the following should be considered except

Planning for capital expenditures is necessary for all of the following reasons except

Budgeted production for product XXX during the month is

What is a capital expenditures budget?

Gilbert's expects its September sales to be 20% higher than its August sales of $150,000.Manufacturing costs were $100,000 in August and are expected to be $120,000 in September.All sales are on credit and are collected as follows: 30% in the month of the sale and 70% in the following month.Payments of manufacturing costs are as follows: 25% in the month of production and 75% in the following month.The beginning cash balance on September 1 is $7,500.The ending balance on September 30 would be

The process of developing budget estimates by requiring all levels of management to estimate sales, production, and other operating data as though operations were being initiated for the first time is referred to as

Match each phrase that follows with the term a-e it describes. -shows expected results at several activity levels

The first budget customarily prepared as part of an entity's master budget is the