Exam 21: Budgeting

As of January 1 of the current year,the Grackle Company had accounts receivables of $50,000.The sales for January,February,and March were as follows: $120,000,$140,000,and $150,000,respectively.Of each month's sales,20% are for cash.Of the remaining 80% (the credit sales),60% are collected in the month of sale,with the remaining 40% collected in the following month.What is the total cash collected (both from accounts receivable and cash sales)in the month of March?

For March,sales revenue is $1,000,000; sales commissions are 5% of sales; the sales manager's salary is $80,000; advertising expenses are $65,000; shipping expenses total 1% of sales; and miscellaneous selling expenses are $2,100 plus 1% of sales.Total selling expenses for the month of March are

At the beginning of the period,the Assembly Department budgeted direct labor of $110,000,direct materials of $170,000,and fixed factory overhead of $28,000 for 8,000 hours of production.The department actually completed 10,000 hours of production.What is the appropriate total budget for the department,assuming it uses flexible budgeting?

What is a cash budget? How does management use a cash budget?

The primary difference between a static budget and a flexible budget is that a static budget

Budgets are normally used only by profit-making businesses.

If Division Inc.expects to sell 200,000 units in the current year,desires ending inventory of 24,000 units,and has 22,000 units on hand as of the beginning of the year,the budgeted volume of production for the year is 198,000 units.

The budgeting process does not involve which of the following activities?

The flexible budget is,in effect,a series of static budgets for different levels of activity.

Flexible budgeting requires all levels of management to start from zero and estimate sales,production,and other operating data as though operations were being started for the first time.

Good Night manufactures comforters.The estimated inventories on January 1 for finished goods,work in process,and materials were $51,000,$28,000,and $33,000,respectively.The desired inventories on December 31 for finished goods,work in process,and materials were $48,000,$35,000,and $29,000,respectively.Direct material purchases were $555,000.Direct labor was $252,000 for the year.Factory overhead was $176,000.Prepare a cost of goods sold budget for Good Night,Inc.

Supervisor salaries,maintenance,and indirect factory wages would normally appear in the operating expenses budget.

The capital expenditures budget is part of the planned investing activities of a company.

The operating budgets of a company includes the

What is the amount of cash excess or deficiency (after considering the minimum cash balance required)for February?

Woodpecker Co.has $296,000 in accounts receivable on January 1.Budgeted sales for January are $860,000.Woodpecker Co.expects to sell 20% of its merchandise for cash.Of the remaining 80% of sales on account,75% are expected to be collected in the month of sale and the remainder the following month.The January cash collections from sales are

Jase Manufacturing Co.'s static budget at 10,000 units of production includes $40,000 for direct labor and $4,000 for electric power.Total fixed costs are $24,000.At 12,000 units of production,a flexible budget would show

The cash budget summarizes future plans for acquisition of fixed assets.

If the expected sales volume for the current period is 7,000 units,the desired ending inventory is 400 units,and the beginning inventory is 400 units,the number of units set forth in the production budget,representing total production for the current period,is

The Ruff Jeans Company produces two different types of jeans,Simple Life,and Fancy Life.The company sales budget estimates that 350,000 of the Simple Life jeans and 200,000 of the Fancy Life jeans will be sold during the current year.The production budget requires 353,500 units of Simple Life and 196,000 Fancy Life be manufactured.The Simple Life jeans require 3 yards of denim material,a zipper,and 25 yards of thread.The Fancy Life jeans require 4.5 yards of denim material,a zipper,and 40 yards of thread.Each yard of denim material costs $3.25,the zipper costs $0.75 each,and the thread is $0.02 per yard.There is enough material to make 2,000 jeans of each type at the beginning of the year.The desired amount of materials left in ending inventory is to have enough to manufacture 3,500 jeans of each type.Prepare a direct materials purchases budget.