Seaworthy Company,a merchandising company,has prepared the following sales budget: \[\begin{array} { | l | l | } \hline \text { Month } & { \text { Budgeted Sales } } \\ \hline \text { March } & \$ 400,000 \\ \hline \text { April } & 207,000 \\ \hline \text { May } & 241,000 \\ \hline \text { Iune } & 248,000 \\ \hline \end{array}\] Cost of goods sold is budgeted at 40% of sales,and the inventory at the end of February was $34,000.Desired inventory levels at the end of each month are 10% of the next month's cost of goods sold.What is the desired beginning inventory on June 1?

A) $24,800 B) $9640 C) $96,400 D) $9920 A) $24,800 B) $9640 C) $96,400 D) $9920

Saniya Corp.is preparing their budget for the second quarter and provides the following data: \[\begin{array} { | l | r | r | r | } \hline & { \text { Apr } } & { \text { May } } & { \text { Jun } } \\ \hline \text { Budgeted purchases of direct materials } & \$ 20,000 & \$ 24,000 & { \$ 23,000 } \\ \hline \begin{array} { l } \text { Budgeted Cash Payments for Purchases of direct } \\ \text { materials } \end{array} &{ \text { Apr } } & { \text { May } } & { \text { Jun } } \\ \hline 60 \% \text { of previous month purchases } & \$ 6,000 & \$ 12,000 & \$ 14,400 \\ \hline 40 \% \text { of current month purchases } & \underline { 8000 } & \underline { 9600 } & \underline { 9200 } \\ \hline \text { Total cash payments } & \$ 14,000 & \$ 21,600 & \$ 23,600 \\ \hline \end{array}\] Assume that accounts payable pertains only to suppliers of direct materials 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) $23,600 B) $14,400 C) $13,800 D) $9200 A) $23,600 B) $14,400 C) $13,800 D) $9200

Edelmar Corp.has prepared a preliminary cash budget for the third quarter as shown below: \[\begin{array} { | l | r | r | r | } \hline \text { Cash Budget } & { \text { July } } & { \text { Aug } } & { \text { Sep } } \\ \hline \text { Beginning cash balance } & \$ 32,000 & \$ 4400 & \$ 6900 \\ \hline \text { Plus: Cash collections } & \$ 49,400 & \$ 51,000 & \underline { 47,800 } \\ \hline \text { Cash available } & 81,400 & \$ 55,400 & \$ 54,700 \\ \hline \text { Less: Cash payments: } & & & \\ \hline \text { Purchases of direct materials } & 36,000 & 9000 & 10,000 \\ \hline \text { Operating expenses } & 40,000 & 30,500 & 30,700 \\ \hline \text { Capital expenditures } & \underline { 1000 } & \underline { 9000 } & \underline { 7000 } \\ \hline \text { Ending cash balance } & \$ 4400 & \$ 6900 & \$ 7000 \\ \hline \end{array}\] Subsequently,the marketing department revised its figures for cash collections.New data are as follows: $52,000 in July,$55,000 in August,and $42,000 in September.Based on the new data,calculate the new projected cash balance at the end of July.

A) $13,500 B) $4400 C) $7000 D) $7800 A) $13,500 B) $4400 C) $7000 D) $7800

Exam 22: Master Budgets

Seaworthy Company,a merchandising company,has prepared the following sales budget: Month Budgeted Sales March \ 400,000 April 207,000 May 241,000 Iune 248,000 Cost of goods sold is budgeted at 40% of sales,and the inventory at the end of February was $34,000.Desired inventory levels at the end of each month are 10% of the next month's cost of goods sold.What is the desired beginning inventory on June 1?

(Multiple Choice)

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Question 141

Robust Resources expects to sell 490 units of Product A and 420 units of Product B each day at an average price of $16 for Product A and $27 for Product B.The expected cost for Product A is 41% of its selling price and the expected cost for Product B is 63% of its selling price.Robust Resources has no beginning inventory,but it wants to have a four-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 142

Which of the following is useful to combine the data of different segments using different software for the purpose of creating companywide budgets?

(Multiple Choice)

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Question 143

Saniya 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 60\% of previous month purchases \ 6,000 \ 12,000 \ 14,400 40\% of current month purchases Total cash payments \ 14,000 \ 21,600 \ 23,600 Assume that accounts payable pertains only to suppliers of direct materials 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 144

The budgeted production of Capricorn,Inc.is 13,000 units per month.Each unit requires 30 minutes of direct labor to complete.The direct labor rate is $80 per hour.Calculate the budgeted cost of direct labor for the month.(Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.)

(Multiple Choice)

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Question 145

The last step in the preparation of the master budget is the budgeted income statement.

(True/False)

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Question 146

List the budgets that are affected by the budgeted number of units to be produced.

(Essay)

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Question 147

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

(True/False)

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Question 148

A static budget is a financial plan for only one level of sales volume.

(True/False)

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Question 149

Edelmar Corp.has prepared a preliminary cash budget for the third quarter as shown below: Cash Budget July Aug Sep Beginning cash balance \ 32,000 \ 4400 \ 6900 Plus: Cash collections \ 49,400 \ 51,000 Cash available 81,400 \ 55,400 \ 54,700 Less: Cash payments: Purchases of direct materials 36,000 9000 10,000 Operating expenses 40,000 30,500 30,700 Capital expenditures Ending cash balance \ 4400 \ 6900 \ 7000 Subsequently,the marketing department revised its figures for cash collections.New data are as follows: $52,000 in July,$55,000 in August,and $42,000 in September.Based on the new data,calculate the new projected cash balance at the end of July.

(Multiple Choice)

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Question 150

In a company with different business units,individual managers make decisions by changing various assumptions of its budget in order to determine how the modifications would affect the operational and financial results.This is an example of ________.

(Multiple Choice)

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Question 151

A manufacturing company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet.While doing so,the Cash balance can be taken from the ________.

(Multiple Choice)

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Question 152

In the cost of goods sold budget,projected manufacturing cost per unit of product sold does NOT include ________ cost per unit.

(Multiple Choice)

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Question 153

List the four budgeting objectives.Why is this process a loop?

(Essay)

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Question 154

From the following details provided by Chestnut,Inc.,prepare the manufacturing overhead budget for the year.Also,calculate the predetermined overhead allocation rate,using direct labor hours as the allocation base. First Quarter Second Quarter Third Quarter Fourth Quarter Budgeted production units 15,000 18,000 21,000 24,000 Variable overhead cost per unit \ 45 \ 45 \ 45 \ 45 Fixed overhead costs: Depreciation \ 3,000 \ 3,000 \ 3,000 \ 3,000 Rent \ 5,000 \ 5,750 \ 6,250 \ 7,250 Direct Labor Hours 12,500 14,500 17,200 12,800

(Essay)

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Question 155

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.

(True/False)

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Question 156

June sales were $27,000,while projected sales for July and August were $51,000 and $69,000,respectively.Sales are 60% cash and 40% credit.All credit sales are collected in the month following the sale.Calculate expected collections for July.

(Multiple Choice)

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Question 157

A strategic budget will be as detailed as an operational budget.

(True/False)

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Question 158

On June 30,Kahlil Company's cash balance is $4,000.Kahlil is now preparing their cash budget for the third quarter of the year.The following data is provided: The amount of cash that should be shown in the budgeted balance sheet as of September 30 would be ________.

(Multiple Choice)

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Question 159

The production manager projects the average direct labor cost per hour.

(True/False)

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Question 160

Which of the following is useful to combine the data of different segments using different software for the purpose of creating companywide budgets?

The last step in the preparation of the master budget is the budgeted income statement.

List the budgets that are affected by the budgeted number of units to be produced.

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

A static budget is a financial plan for only one level of sales volume.

In a company with different business units,individual managers make decisions by changing various assumptions of its budget in order to determine how the modifications would affect the operational and financial results.This is an example of ________.

A manufacturing company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet.While doing so,the Cash balance can be taken from the ________.

In the cost of goods sold budget,projected manufacturing cost per unit of product sold does NOT include ________ cost per unit.

List the four budgeting objectives.Why is this process a loop?

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.

June sales were $27,000,while projected sales for July and August were $51,000 and $69,000,respectively.Sales are 60% cash and 40% credit.All credit sales are collected in the month following the sale.Calculate expected collections for July.

A strategic budget will be as detailed as an operational budget.

On June 30,Kahlil Company's cash balance is $4,000.Kahlil is now preparing their cash budget for the third quarter of the year.The following data is provided: The amount of cash that should be shown in the budgeted balance sheet as of September 30 would be ________.

The production manager projects the average direct labor cost per hour.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

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Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

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Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

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Cost-Volume-Profit Analysis

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

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