Question 1

A strategic budget is a long-term financial plan used to coordinate the activities needed to achieve the long-term goals of the company.

Accepted Answer

A) True 
 B)False

Question 2

Alyssum,Inc.,a merchandising company,has provided the following extracts from their budget for the first quarter of the forthcoming year: $$\begin{array} { | l | c | c | c | } 
\hline & \text { Jan } & \text { Feb } & \text { March } \
\hline \text { Purchases on account } & \$ 264,000 & \$ 295,000 & \$ 320,000 \
\hline
\end{array}$$ The vendors have required the following terms of payment:
$$\begin{array} { | l | l | } 
\hline \text { Month of purchase } & 30 \% \
\hline \text { First month after the purchase } & 35 \% \
\hline \text { Second month after the purchase } & 35 \% \
\hline
\end{array}$$ Calculate the total payment on account for the month of March.

Accepted Answer

A)  $168,275 
B)  $136,955 
C)  $320,000 
D)  $291,650 
A)  $168,275 
B)  $136,955 
C)  $320,000 
D)  $291,650

Question 3

Hygeia Health expects to sell 460 units of Product A and 450 units of Product B each day at an average price of $15 for Product A and $33 for Product B.The expected cost for Product A is 38% of its selling price and the expected cost for Product B is 57% of its selling price.Hygeia Health has no beginning inventory,but it wants to have a six-day supply of ending inventory for each product.Compute the budgeted cost of goods sold for the next (seven-day)week.(Round the answer to the nearest dollar.)

Accepted Answer

A)  $67,032 
B)  $66,519 
C)  $130,500 
D)  $77,606 
A)  $67,032 
B)  $66,519 
C)  $130,500 
D)  $77,606

Question 4

Jaborosa,Inc.,a merchandising company,has provided the following budgeted amounts for the next budget period. $$\begin{array} { | l | l | } 
\hline \text { Beginning cash balance } & \$ 30,400 \
\hline \text { Cash collections } & 683,000 \
\hline \text { Payments for: } & \
\hline \text { Purchases of merchandise inventory } & 349,400 \
\hline \text { Selling and administrative expenses } & 70,700 \
\hline \text { Capital expenditures } & 38,600 \
\hline
\end{array}$$ A minimum cash balance of $250,000 is required to be maintained.The company can borrow in increments of $10,000 as and when required.Assume the company can borrow the needed funds at the end of the period.Calculate the ending cash balance for the budget period.

Accepted Answer

A)  $713,400 
B)  $254,700 
C)  $204,700 
D)  $733,000 
A)  $713,400 
B)  $254,700 
C)  $204,700 
D)  $733,000

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

The inventory costing method affects the process of preparing the cost of goods sold budget.

Accepted Answer

A) True 
 B)False

Question 7

A budget represents the plans that a company has in place to achieve its goals.

Accepted Answer

A) True 
 B)False

Question 8

Berman Company is preparing its budget for the third quarter.Cash balance on July 31 was $34,000.Assume there is no minimum balance of cash required and no borrowing is undertaken.Additional budgeted data are provided here: $$\begin{array} { | l | r | r | r | } 
\hline &{ \text { July } } &{ \text { Aug } } & { \text { Sep } } \
\hline \text { Cash collections } & \$ 50,000 & \$ 54,000 & \$ 54,000 \
\hline \text { Cash payments } & & & \
\hline \text { Purchases of direct materials } & 24,000 & 22,000 & 18,000 \
\hline \text { Operating expenses } & 33,000 & 21,000 & 34,000 \
\hline \text { Capital expenditures } & 10,000 & 7000 & 16,000 \
\hline
\end{array}$$ Calculate the projected balance of cash at the end of August.

Accepted Answer

A)  $16,000 
B)  $104,000 
C)  $45,000 
D)  $38,000 
A)  $16,000 
B)  $104,000 
C)  $45,000 
D)  $38,000

Question 9

The direct materials budget is prepared using information from the ________ budget.

Accepted Answer

A)  cash 
B)  master 
C)  capital expenditure 
D)  production 
A)  cash 
B)  master 
C)  capital expenditure 
D)  production

Question 10

Roberts Supply,Inc.provides the following data taken from its third quarter budget: $$\begin{array} { | l | r | r | r | } 
\hline & { \text { Jul } } & { \text { Aug } } &  { \text { Sep } } \
\hline \text { Cash collections } & \$ 81,000 & \$ 65,000 & \$ 56,000 \
\hline \text { Cash payments: } & & & \
\hline \text { Purchases of direct materials } & 52,000 & 28,000 & 30,000 \
\hline \text { Operating expenses } & 10,000 & 16,000 & 21,000 \
\hline \text { Capital expenditures } & 0 & 32,000 & 8000 \
\hline
\end{array}$$ The cash balance on June 30 is projected to be $11,000.Based on the above data,calculate the cash balance the company is projected to have at the end of September.

Accepted Answer

A)  $16,000 
B)  $19,000 
C)  $75,000 
D)  $59,000 
A)  $16,000 
B)  $19,000 
C)  $75,000 
D)  $59,000

Question 11

Culinary Enterprises manufactures cookware sets and sells the sets to department stores.Culinary expects to sell 2800 cookware sets for $280 each in April and 4000 cookware sets for $295 each in May.Sales are 30% cash and 70% on account.Compute the total budgeted sales for May.

Accepted Answer

A)  $1,180,000 
B)  $784,000 
C)  $354,000 
D)  $826,000 
A)  $1,180,000 
B)  $784,000 
C)  $354,000 
D)  $826,000

Question 12

When a manufacturing company prepares the budgeted balance sheet,the balance of the Accounts Payable account is taken from the cash budget.

Accepted Answer

A) True 
 B)False

Question 13

Beridze Manufacturing expects to produce 2900 units in January and 3600 units in February.Beridze budgets $20 per unit for direct materials.The amount of indirect materials needed for production has been determined to be insignificant and will therefore not be considered in the calculation.The balance in the Raw Materials Inventory account (all direct materials)on January 1 is $38,650.Beridze desires the ending balance in Raw Materials Inventory to be 10% of the next month's direct materials needed for production.Desired ending balance for February is $51,100.What is the cost of budgeted purchases of direct materials needed for January?

Accepted Answer

A)  $58,000 
B)  $65,200 
C)  $26,550 
D)  $25,150 
A)  $58,000 
B)  $65,200 
C)  $26,550 
D)  $25,150

Question 14

In the production budget,the total number of units to be produced is equal to budgeted sales in units ________.

Accepted Answer

A)  plus the desired units in ending inventory minus the number of units in beginning inventory 
B)  minus the desired units in ending inventory minus the number of units in beginning inventory 
C)  minus the desired units in ending inventory plus the number of units in beginning inventory 
D)  plus the desired units in ending inventory plus the number of units in beginning inventory 
A)  plus the desired units in ending inventory minus the number of units in beginning inventory 
B)  minus the desired units in ending inventory minus the number of units in beginning inventory 
C)  minus the desired units in ending inventory plus the number of units in beginning inventory 
D)  plus the desired units in ending inventory plus the number of units in beginning inventory

Question 15

A manufacturing company has prepared the operating budget,the cash budget,and the budgeted income statement and is now preparing the budgeted balance sheet.The balance of Retained Earnings can be taken from the ________.

Accepted Answer

A)  cost of goods sold budget 
B)  schedule of cash receipts 
C)  cash budget 
D)  balance sheet of the previous year and the budgeted income statement 
A)  cost of goods sold budget 
B)  schedule of cash receipts 
C)  cash budget 
D)  balance sheet of the previous year and the budgeted income statement

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

For a manufacturing company,the budgeted income statement is a cash basis income statement.

Accepted Answer

A) True 
 B)False

Question 18

Tolga Moving Systems,Inc.has provided the following details for direct materials purchased on account in different months.
 $$\begin{array} { l l } 
\text { Jan } & \$ 35,000 \
\text { Feb } & \mathbf { 3 , 0 0 0 } \
\text { March } & \mathbf { 3 4 , 0 0 0 } \
\text { April } & \mathbf { 3 9 , 0 0 0 } \
\text { May } & \mathbf { 3 2 , 0 0 0 } \
\text { June } & \mathbf { 2 9 , 0 0 0 }
\end{array}$$ The terms of payment offered by the suppliers are to pay 70% in the month of purchase and 30% in the following month.Calculate the payments on account made during the first six months.

Accepted Answer

\[\begin{array} { l l l l l l l } 
& \te

Question 19

The cost accountant works with the office and sales managers to develop the selling and administrative expense budget.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

A strategic budget is a long-term financial plan used to coordinate the activities needed to achieve the long-term goals of the company.

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

The inventory costing method affects the process of preparing the cost of goods sold budget.

A budget represents the plans that a company has in place to achieve its goals.

The direct materials budget is prepared using information from the ________ budget.

Culinary Enterprises manufactures cookware sets and sells the sets to department stores.Culinary expects to sell 2800 cookware sets for $280 each in April and 4000 cookware sets for $295 each in May.Sales are 30% cash and 70% on account.Compute the total budgeted sales for May.

When a manufacturing company prepares the budgeted balance sheet,the balance of the Accounts Payable account is taken from the cash budget.

In the production budget,the total number of units to be produced is equal to budgeted sales in units ________.

A manufacturing company has prepared the operating budget,the cash budget,and the budgeted income statement and is now preparing the budgeted balance sheet.The balance of Retained Earnings can be taken from the ________.

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

For a manufacturing company,the budgeted income statement is a cash basis income statement.

The cost accountant works with the office and sales managers to develop the selling and administrative expense budget.

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

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

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

Filters

Exam 22: Master Budgets

A strategic budget is a long-term financial plan used to coordinate the activities needed to achieve the long-term goals of the company.

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

The inventory costing method affects the process of preparing the cost of goods sold budget.

A budget represents the plans that a company has in place to achieve its goals.

The direct materials budget is prepared using information from the ________ budget.

Culinary Enterprises manufactures cookware sets and sells the sets to department stores.Culinary expects to sell 2800 cookware sets for $280 each in April and 4000 cookware sets for $295 each in May.Sales are 30% cash and 70% on account.Compute the total budgeted sales for May.

When a manufacturing company prepares the budgeted balance sheet,the balance of the Accounts Payable account is taken from the cash budget.

In the production budget,the total number of units to be produced is equal to budgeted sales in units ________.

A manufacturing company has prepared the operating budget,the cash budget,and the budgeted income statement and is now preparing the budgeted balance sheet.The balance of Retained Earnings can be taken from the ________.

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

For a manufacturing company,the budgeted income statement is a cash basis income statement.

The cost accountant works with the office and sales managers to develop the selling and administrative expense budget.

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

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

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

Filters