Exam 21: Budgeting

The budgeting process is used to effectively communicate planned expectations regarding profits and expenses to the entire organization.

A formal written statement of management's plans for the future,expressed in financial terms,is a

The cash collections expected in November from accounts receivable are projected to be

Prepare a flexible budget for Cedar Jeans Company using production levels of 16,000,18,000,and 20,000 units produced.The following is additional information necessary to complete the budget: Variable costs: ​ Fixed costs:

A company's history indicates that 20% of its sales are for cash and the rest are on credit.Collections on credit sales are 20% in the month of the sale,50% in the next month,25% the following month,and 5% is uncollectible.Projected sales for December,January,and February are $60,000,$85,000,and $95,000,respectively.The February expected cash receipts from all current and prior credit sales are

A variant of fiscal-year budgeting whereby a twelve-month projection into the future is maintained at all times is termed

The production budgets are used to prepare which of the following budgets?

Good Eats Inc.manufactures flatware sets.The budgeted production is for 80,000 sets this year.Each set requires 2.5 hours to polish the material.If polishing labor costs $15.00 per hour,determine the direct labor cost budget for polishing for the year.

Consider Derek's budget information: materials to be used totals $64,750; direct labor totals $198,400; factory overhead totals $394,800; work in process inventory January 1,$189,100; and work in progress inventory on December 31,$197,600.What is the budgeted cost of goods manufactured for the year?

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 for cash sales)in the month of February?

Laurie Inc.'s static budget for 10,000 units of production includes $60,000 for direct materials,$44,000 for direct labor,fixed utilities costs of $5,000,and supervisor salaries of $25,000.A flexible budget for 12,000 units of production would show

The master budget of a small manufacturer would normally include all necessary component budgets except the capital expenditures budget.

Consulting the persons affected by a budget when it is prepared can provide an effective means of motivation and cooperation.

Sleep Tight manufactures comforters.The estimated inventories on January 1 for finished goods,work in process,and materials were $39,000,$33,000,and $27,000,respectively.The desired inventories on December 31 for finished goods,work in process,and materials were $42,000,$35,000,and $21,000,respectively.Direct material purchases were $575,000,direct labor was $212,000 for the year,and factory overhead was $156,000.Prepare a cost of goods sold budget for Sleep Tight,Inc.

When budget goals are set too tight,the budget becomes less effective as a tool for planning and controlling operations.

The cash collections in November are

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

If budgeted beginning inventory is $8,000,budgeted ending inventory is $9,400,and budgeted cost of goods sold is $10,260,budgeted production should be

The budgeted direct materials purchases is based on the sum of (1)the materials needed for production and (2)the desired ending materials inventory,less (3)the estimated beginning materials inventory.

What is the budgeted units of production for January?