Chatelain Company is preparing its budget for the third quarter.The cash balance on June 30 was $32,000.Additional budgeted data are provided here: \[\begin{array} { | l | r | r | r | } \hline & { \text { Jul } } & { \text { Aug } } & { \text { Sep } } \\ \hline \text { Cash collections } & \$ 54,000 & \$ 53,000 & \$ 54,000 \\ \hline \text { Cash payments } & & & \\ \hline \text { Purchases of direct materials } & 22,000 & 24,000 & 21,000 \\ \hline \text { Operating expenses } & 21,000 & 19,000 & 27,000 \\ \hline \text { Capital expenditures } & 8,000 & 9,000 & 13,000 \\ \hline \end{array}\] What amount should be shown in the cash budget for the cash balance at the end of July?

A) $19,000 B) $35,000 C) $105,000 D) $86,000 A) $19,000 B) $35,000 C) $105,000 D) $86,000

General,Inc.has prepared the following direct materials purchases budget: $\begin{array}{|c|c|} \hline \text { Month } & \begin{array}{l} \text { Budgeted DM } \\ \text { Purchases } \end{array} \\ \hline \text { June } & \$ 69,000 \\ \hline \text { July } & 77,500 \\ \hline \text { August } & 76,900 \\ \hline \text { September } & 77,800 \\ \hline \text { October } & 76,800 \\ \hline \end{array}$ All purchases are paid for as follows: 10% in the month of purchase,50% in the following month,and 40% two months after purchase.Calculate budgeted balance of accounts payable at the end of October.

A) $69,120 B) $100,240 C) $31,120 D) $61,840 A) $69,120 B) $100,240 C) $31,120 D) $61,840

Americana Company is preparing its budget for the third quarter.Cash balance on July 31 was $32,000.Assume there is no minimum balance of cash required and no borrowing is undertaken.Additional budgeted data are provided here: \[\begin{array} { | l | r | r | r | } \hline &{ \text { Jul } } & { \text { Aug } } & { \text { Sep } } \\ \hline \text { Cash collections } & \$ 54,000 & \$ 54,000 & \$ 54,000 \\ \hline \text { Cash payments } & & & \\ \hline \text { Purchases of direct materials } & 25,000 & 22,000 & 25,000 \\ \hline \text { Operating expenses } & 31,000 & 26,000 & 29,000 \\ \hline \text { Capital expenditures } & 13,000 & 7,000 & 16,000 \\ \hline \end{array}\] Calculate the projected balance of cash at the end of August.

A) $23,000 B) $109,000 C) $38,000 D) $31,000 A) $23,000 B) $109,000 C) $38,000 D) $31,000

Nobula Corp.is preparing their budget for the second quarter and provides the following data: \[\begin{array} { | l | r | r | r | } \hline & { \text { Apr } } & { \text { May } } & { \text { Jun } } \\ \hline \text { Budgeted purchases of direct materials } & \$ 20,000 & \$ 24,000 & { \$ 23,000 } \\ \hline \begin{array} { l } \text { Budgeted Cash Payments for Purchases of direct } \\ \text { materials } \end{array} & { \text { Apr } } & { \text { May } } & { \text { Jun } } \\ \hline 40 \% \text { of previous month purchases } & \$ 6,000 & \$ 8,000 & \$ 9,600 \\ \hline 60 \% \text { of current month purchases } & \underline { 12,000 } & \underline { 14,400 } & 13,800 \\ \hline \text { Total cash payments } & \$ 18,000 & \$ 22,400 & \$ 23,400 \\ \hline \end{array}\] Assume that accounts payable pertains only to suppliers of inventory.Based on the above data,the amount of Accounts Payable that should be shown in the budgeted balance sheet as of June 30 is ________.

A) $23,400 B) $9,600 C) $9,200 D) $13,800 A) $23,400 B) $9,600 C) $9,200 D) $13,800

Freighters,Inc.has the following budgeted figures: Calculate the budgeted purchases for the month of January. $\begin{array}{|l|l|l|l|l} \hline & \text {Jan } & \text { Feb } & \text { Mar } & \text { April } \\ \hline \text { Sales } & \$ 56,200 & \$ 68,000 & \$ 82,000 & \$ 91,000 \\ \hline \text { Cost of goods sold } & 50 \% \text { of sales } & & & \\ \hline & \$ 10,000+20 \% & & & \\ & \begin{array}{l} \text { of next month's } \\ \text { sales } \end{array} & & & \\ \text { Required ending inventory } & & & & \\ \hline \text { Inventory on hand on Jan 1 } & \$ 27,000 & & \\ \hline \end{array}$

A) $23,600 B) $51,700 C) $24,700 D) $4,500 A) $23,600 B) $51,700 C) $24,700 D) $4,500

Exam 22: Master Budgets

Chatelain Company is preparing its budget for the third quarter.The cash balance on June 30 was $32,000.Additional budgeted data are provided here: Jul Aug Sep Cash collections \ 54,000 \ 53,000 \ 54,000 Cash payments Purchases of direct materials 22,000 24,000 21,000 Operating expenses 21,000 19,000 27,000 Capital expenditures 8,000 9,000 13,000 What amount should be shown in the cash budget for the cash balance at the end of July?

(Multiple Choice)

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Question 41

The financial budget of a merchandising company is similar to that of a manufacturing company.

(True/False)

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Question 42

Kapital,Inc.has prepared the operating budget for the first quarter of the year.The company forecast sales of $50,000 in January,$60,000 in February,and $70,000 in March.Variable and fixed selling and administrative expenses are as follows: Variable Expenses: Power cost (30% of sales) Miscellaneous expenses: (10% of sales) Fixed Expenses: Salary expense: $6,000 per month Salaries expense: $4,000 per month Depreciation expense: $1,400 per month Power cost/fixed portion: $800 per month Miscellaneous expenses/fixed portion: $1,000 per month Calculate total selling and administrative expenses for the month of January.

(Multiple Choice)

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Question 43

The amount of accumulated depreciation for the budgeted balance sheet can be obtained from the ________.

(Multiple Choice)

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Question 44

General,Inc.has prepared the following direct materials purchases budget: Month Budgeted DM Purchases June \ 69,000 July 77,500 August 76,900 September 77,800 October 76,800 All purchases are paid for as follows: 10% in the month of purchase,50% in the following month,and 40% two months after purchase.Calculate budgeted balance of accounts payable at the end of October.

(Multiple Choice)

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Question 45

Which of the following is an example of the coordination and communication function of the budgeting process?

(Multiple Choice)

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Question 46

Budgetary slack occurs when managers intentionally overstate expected revenues or understate expected expenses.

(True/False)

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Question 47

Health Resources expects to sell 480 units of Product A and 440 units of Product B each day at an average price of $19 for Product A and $32 for Product B.The expected cost for Product A is 40% of its selling price and the expected cost for Product B is 62% of its selling price.Health Resources has no beginning inventory,but it wants to have a six-day supply of ending inventory for each product.Compute the company's budgeted sales for the next (seven-day)week.(Round the answer to the nearest dollar.)

(Multiple Choice)

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Question 48

Americana Company is preparing its budget for the third quarter.Cash balance on July 31 was $32,000.Assume there is no minimum balance of cash required and no borrowing is undertaken.Additional budgeted data are provided here: Jul Aug Sep Cash collections \ 54,000 \ 54,000 \ 54,000 Cash payments Purchases of direct materials 25,000 22,000 25,000 Operating expenses 31,000 26,000 29,000 Capital expenditures 13,000 7,000 16,000 Calculate the projected balance of cash at the end of August.

(Multiple Choice)

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Question 49

Lindsey Chocolate,Inc.has prepared its third quarter budget and provided the following data: Jul Aug Sep Cash collections \ 51,000 \ 39,600 \ 46,900 Cash payments: Purchases of direct materials 31,000 21,100 17,800 Operating expenses 12,000 8,500 11,500 Capital expenditures 13,400 24,500 0 The cash balance on June 30 is projected to be $4,000.The company has to maintain a minimum cash balance of $5,000 and is authorized to borrow at the end of each month to make up any shortfalls.It may borrow in increments of $5,000 and has to pay interest every month at an annual rate of 4%.All financing transactions are assumed to take place at the end of the month.The loan balance should be repaid in increments of $5,000 whenever there is surplus cash.Calculate the ending projected cash balance before financing for August.

(Multiple Choice)

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Question 50

Scotch,Inc.has prepared the operating budget for the first quarter of the year.The company forecast sales of $45,000 in January,$55,000 in February,and $65,000 in March.Variable and fixed expenses are as follows: Variable Expenses: Power cost (40% of sales) Miscellaneous expenses: (15% of sales) Fixed Expenses: Salaries expense: $10,000 per month Rent expense: $5,000 per month Depreciation expense: $1,200 per month Power cost/fixed portion: $800 per month Miscellaneous expenses/fixed portion: $1,200 per month Using the information above,calculate the amount of selling and administrative expenses for the month of February.

(Multiple Choice)

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Question 51

The level of forecasted sales has little effect on other elements of the master budget.

(True/False)

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Question 52

Nobula Corp.is preparing their budget for the second quarter and provides the following data: Apr May Jun Budgeted purchases of direct materials \ 20,000 \ 24,000 \ 23,000 Budgeted Cash Payments for Purchases of direct materials Apr May Jun 40\% of previous month purchases \ 6,000 \ 8,000 \ 9,600 60\% of current month purchases 13,800 Total cash payments \ 18,000 \ 22,400 \ 23,400 Assume that accounts payable pertains only to suppliers of inventory.Based on the above data,the amount of Accounts Payable that should be shown in the budgeted balance sheet as of June 30 is ________.

(Multiple Choice)

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Question 53

The Raw Materials Inventory account is must be considered when calculating the amount of materials to be purchased.

(True/False)

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Question 54

Fly GenX,Inc.has the following budgeted sales for the next quarter. Month: Units 10,000 11,000 12,000 Inventory of finished goods on hand at the beginning of the quarter is 4,000 units.The company desires to maintain ending inventory equal to beginning inventory plus 1,000 units every month. Calculate the quantity to be produced during the quarter.

(Essay)

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Question 55

Which of the following is true of the sales budget?

(Multiple Choice)

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Question 56

The production manager projects direct labor costs.

(True/False)

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Question 57

The manufacturing overhead budget calculates the budgeted overhead cost for the year,but not the predetermined overhead allocation rate for the year.

(True/False)

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Question 58

Freighters,Inc.has the following budgeted figures: Calculate the budgeted purchases for the month of January. Jan Feb Mar April Sales \ 56,200 \ 68,000 \ 82,000 \ 91,000 Cost of goods sold 50\% of sales \ 10,000+20\% of next month's sales Required ending inventory Inventory on hand on Jan 1 \ 27,000

(Multiple Choice)

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Question 59

The ________ details how the business expects to go from the beginning cash balance to the desired ending cash balance.

(Multiple Choice)

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Question 60

The financial budget of a merchandising company is similar to that of a manufacturing company.

The amount of accumulated depreciation for the budgeted balance sheet can be obtained from the ________.

Which of the following is an example of the coordination and communication function of the budgeting process?

Budgetary slack occurs when managers intentionally overstate expected revenues or understate expected expenses.

The level of forecasted sales has little effect on other elements of the master budget.

The Raw Materials Inventory account is must be considered when calculating the amount of materials to be purchased.

Which of the following is true of the sales budget?

The production manager projects direct labor costs.

The manufacturing overhead budget calculates the budgeted overhead cost for the year,but not the predetermined overhead allocation rate for the year.

Freighters,Inc.has the following budgeted figures: Calculate the budgeted purchases for the month of January. Jan Feb Mar April Sales \ 56,200 \ 68,000 \ 82,000 \ 91,000 Cost of goods sold 50\% of sales \ 10,000+20\% of next month's sales Required ending inventory Inventory on hand on Jan 1 \ 27,000

The ________ details how the business expects to go from the beginning cash balance to the desired ending cash balance.

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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