Exam 22: Master Budgets

Which of the following is an example of the planning function of the budgeting process?

June sales were $22,000,while projected sales for July and August were $45,000 and $63,000,respectively.Sales are 60% cash and 40% credit.All credit sales are collected in the month following the sale.Calculate expected collections for July.

List the three sections of the cash budget.

When preparing the direct labor budget,________.

In the budgeted statement of cash flows,all cash receipts and payments are categorized into operating,financing,and ________ activities.

The budgeting process ________.

Budgeted purchases of direct materials is determined by adding direct materials needed for production to the desired direct materials in ending inventory.

While preparing the budgeted income statement of a merchandising company,the amount of cost of goods sold can be taken from the ________.

When a company is preparing a budgeted statement of cash flows,the payments for selling and administrative expenses can be obtained from the ________.

When preparing the cost of goods sold budget,________.

Keeping merchandise inventory at the maximum level that meets the needs of providing goods to customers,with turning over the merchandise inventory efficiently,helps reduce inventory storage costs,insurance costs,and warehousing costs.

From the following details,provided by a merchandising company,prepare the selling and administrative expenses budget for the first quarter of the next year. Rent Expense \ 8,000 per month Depreciation Expense \ 3,500 per month Insurance Expense \ 1,250 per month Miscellaneous Expense 2\% of sales, paid as incurred Commissions Expense 10\% of sales Salaries Expense \ 7,000 per month Jan Feb March Sales \ 50,000 \ 65,000 \ 80,000

The Finished Goods Inventory account must be considered when calculating the amount of materials to be purchased.

Louise,Inc.has a cash balance of $24,000 on April 1.The company is now preparing the cash budget for the second quarter.Budgeted cash collections and payments are as follows: Apr May Jun Cash collections \ 20,000 \ 25,000 \ 24,000 Cash payments: Purchases of direct materials 4,000 4,000 6,200 Operating expenses 6,000 4,600 4,600 There are no budgeted capital expenditures or financing transactions during the quarter.Based on the above data,calculate the projected cash balance at the end of May.

After comparing budgets with the actual results,the feedback allows managers to determine what,if any,corrective action should be taken.

The cost accountant works directly with the corporate president to develop the selling and administrative expense budget.

There is no need for managers to have employees participate in developing the budget because the budget is a management tool.

Which of the following statements is true of the capital expenditures budget?

Which of the following describes the production budget?

A company with different segments using different software configurations can easily combine budget data of different segments to create the master budget.