Exam 21: Budgeting

Which of the following budgets allow for adjustments in activity levels?

At the beginning of the period,the Cutting Department budgeted direct labor of $155,000,direct materials of $165,000,and fixed factory overhead of $15,000 for 9,000 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?

The budget procedure that requires all levels of management to start from zero in estimating sales,production,and other operating data is called continuous budgeting.

What is a capital expenditures budget?

Budgeted production of Product A for the year would be

Production and sales estimates for May for the Cardinal Co.are as follows: ​ The number of units expected to be sold in May is

Tara Company's budget shows the following credit sales for the current year: September,$25,000; October,$36,000; November,$30,000; December,$32,000.Experience has shown that payment for credit sales is received as follows: 15% in the month of sale,60% in the first month after sale,20% in the second month after sale,and 5% is uncollectible.How much cash will Tara Company expect to collect in November as a result of current and past credit sales?

Part of the cash budget is based on information drawn from the capital expenditures budget.

The benefits of comparing actual performance of the operations against planned goals include all of the following except

Magnolia,Inc.manufactures bedding sets.The budgeted production is for 55,000 comforters this year.Each comforter requires 7 yards of material.The estimated January 1 beginning inventory is 31,000 yards with the desired ending balance of 30,000 yards of material.If the material costs $4.00 per yard,determine the materials budget for the year.

At the beginning of the period,the Cutting Department budgeted direct labor of $30,000 and supervisor salaries of $20,000 for 3,000 hours of production.The department actually completed 5,000 hours of production.Determine the budget for the department assuming that it uses flexible budgeting.

Doran Technologies produces a single product.Expected manufacturing costs are as follows: Variable costs Direct materials $4.00 per unit Direct labor $1.20 per unit Manufacturing overhead $0.95 per unit ​ Fixed costs per month Depreciation $ 6,000 Supervisory salaries 13,500 Other fixed costs 3,850 ​ Estimate manufacturing costs for production levels of 25,000 units,30,000 units,and 35,000 units per month.

The first budget customarily prepared as part of an entity's master budget is the

Star Co.was organized on August 1 of the current year.Projected sales for the next three months are as follows: ​ ​ The company expects to sell 50% of its merchandise for cash.Of the sales on account,30% are expected to be collected in the month of the sale and the remainder in the following month. Prepare a schedule indicating cash collections for August,September,and October.

The responsibility for coordinating the preparation of a master budget should be assigned to the CEO of a firm.

The process of developing budget estimates by requiring all levels of management to estimate sales,production,and other operating data as though operations were being initiated for the first time is referred to as

Kid's World Industries has projected sales of 67,000 machines for the current year.The estimated January 1 inventory is 6,000 units,and the desired December 31 inventory is 15,000 units.What is the budgeted production (in units)for the year?

The budgeted finished goods inventory and cost of goods sold for a manufacturing company for the year are as follows: January 1 finished goods,$765,000; December 31 finished goods,$640,000; and cost of goods sold,$2,560,000.The budgeted costs of goods manufactured is

As of January 1 of the current year,the Grayson Company had accounts receivables of $40,000.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 for cash sales)in the month of January?

Heedy Company is trying to decide how many units of merchandise to produce each month.The company policy is to have 20% of the next month's sales in inventory at the end of each month.Projected sales for August,September,and October are 30,000 units,20,000 units,and 40,000 units,respectively.How many units must be produced in September?