Exam 9: Budgeting, Production, Cash, and Master Budget

May \ 100,000 June \ 120,000 July \ 130,000 August (expected) \ 150,000 -Refer to Miso Company. What cash is budgeted to be collected on account in August?

Barkin Company budgeted the following sales in units: April 50,000 May 20,000 June 40,000 The company's policy is to have 20% of the following month's sales in finished goods inventory. On April 1, finished goods inventory equalled 10,000 units. What is May's production in units?

Shortie Company Shortie Company produces two products: X Brand and Y Brand. Budgeted sales are as follows: May 10,000 40,000 June 20,000 70,000 July 15,000 80,000 August 30,000 90,000 The company's ending finished goods inventory policy is that X Brand should have 10% of its next month's sales in ending finished goods inventory and Y Brand should have 20% of next month's sales in its ending finished goods inventory. On May 1, finished goods inventory consisted of 1,000 units of X Brand and 9,000 units of Y Brand.Y Brand requires four units of component A. (X Brand does not use component A.) On May 1, 2,100 units of component A were in direct materials inventory. The company wants to have 30% of the following month's production needs in direct materials inventory for component A. -Refer to Shortie Company. How many units of component A are budgeted to be purchased in May?

Yax Company expects sales of $40,000 in July, $50,000 in August, and $30,000 in September. The company's experience is that 40% of sales are cash, and the remainder are on account. Accounts receivable are paid: 70% in the month of sale, and 25% in the following month. Required: A. Calculate the expected cash receipts on accounts receivable in August for July sales. B. Calculate the expected cash receipts on accounts receivable in August for August sales. C. Calculate the total expected cash receipts on accounts receivable in August. D. Calculate the total expected cash receipts in August. E. Calculate how much of July sales are deemed to be uncollectible.

Which of the following generally reflects the most appropriate formula to compute the units to be produced?

The cash is directly used in the development of the production budget.

Refer to BoomBoom Company. What is the amount of expected sales revenue for February?

The output of the cost of goods sold budget is entered into the pro forma income statement.

A firm should develop a strategic plan after preparing a budget.

In which order are budgets prepared?

The first budget prepared when developing a master budget is the sales budget.

Control is looking ahead to see what actions should be taken to realize particular goals.

Identify each item as a component of one of the following budgets.* Each option may be used more than once, and it is possible that one or more of the options may not be used at all. -Units of direct materials needed for each unit of product

Which action would management take if the company anticipates selling $200,000 of goods, of which $20,000 will probably be uncollectible?

Wammy Company makes rolling suitcases. Its sales budget for four months is as follows: Month Unit Sales March 15,000 April 20,000 May 40,000 June 60,000 The company's policy is that ending finished goods inventory should equal 30% of the next month's sales. Beginning finished goods inventory (March 1) is 5,300 suitcases. Each suitcase required 1.5 metres of ballistic nylon. The ending direct materials inventory policy for nylon is that 20% of the following month's production needs must be on hand. On March 1, Wammy had 10,450 metres of nylon in direct materials inventory. Required: A. Calculate the desired ending finished goods inventory of suitcases for April. B. Calculate the budgeted production of suitcases for April. C. Calculate the desired ending direct materials inventory of nylon for March. D. Calculate the budgeted metres of nylon to be purchased in March. E. Assuming each suitcase required 2 metres of ballistic nylon, calculate the desired ending direct materials inventory of nylon for March.

A company has the following accounts receivable payment history: Paid in the month of sale 10% Paid in the month following sale 30% Paid in the second month following sale 40% Paid in the third month following sale 10% Which action might increase the cash receipts over the coming year?

Budgets should be based on ideal standards to encourage everyone to reach for the highest level of performance.

Refer to Wallen Company. What is the budgeted selling and marketing expense?

Monetary incentives include job satisfaction, increased responsibility, and firm recognition of a job well done.

Kanban Company estimated sales of 40,000 units at $6 each. Budgeted cost of goods sold per unit includes $1.20 of direct materials, six minutes of direct labour time at $15 per hour, and unit manufacturing overhead cost of $1.30. Kanban pays a sales commission of 10% of sales revenue. Fixed selling and administrative expenses are budgeted at $25,000. Required: A. Prepare a statement of operating income. B. Calculate the budgeted variable selling expense. C. Calcualte the budgeted operating income. D. Recalculate budgeted operating income assuming fixed selling and administrative expenses double and the selling price per unit increases 10%.