Question 1

Unlike a manufacturing company,the sales budget is the cornerstone for the master budget of a merchandising company.

Accepted Answer

A) True 
 B)False  False

Question 2

Farmerlands,Inc.has budgeted sales for the months of September and October at $304,000 and $272,000,respectively.Monthly sales are 80% credit and 20% cash.Of the credit sales,50% are collected in the month of sale,and 50% are collected in the following month.Calculate cash collections for the month of October.

Accepted Answer

A) $163,200 
B) $291,200 
C) $284,800 
D) $182,400 
A) $163,200 
B) $291,200 
C) $284,800 
D) $182,400 C

Question 3

Pavone Corp.has prepared a preliminary cash budget for the third quarter as shown below:
 
Subsequently,the marketing department revised its figures for cash collections.New data are as follows: $53,000 in July,$56,000 in August,and $43,000 in September.Based on the new data,calculate the new projected cash balance at the end of September.

Accepted Answer

A) $19,500 
B) $16,300 
C) $12,000 
D) $13,300 
A) $19,500 
B) $16,300 
C) $12,000 
D) $13,300 D

Question 4

The final step in the process of creating the master budget is the preparation of the ________.

Accepted Answer

A) operating budget 
B) budgeted balance sheet 
C) budgeted statement of cash flows 
D) cash budget 
A) operating budget 
B) budgeted balance sheet 
C) budgeted statement of cash flows 
D) cash budget

Question 5

Uncle's Caps,Inc. ,a merchandising company,has provided the following budgeted amounts for the next budget period.
 
A minimum cash balance of $250,000 is required to be maintained.The company can borrow in increments of $10,000 as and when required.Assume the company can borrow the needed funds at the end of the period.Calculate the ending cash balance for the budget period.

Accepted Answer

A) $713,400 
B) $254,600 
C) $204,600 
D) $733,000 
A) $713,400 
B) $254,600 
C) $204,600 
D) $733,000

Question 6

Which of the following describes the cash budget?

Accepted Answer

A) It aids in planning to ensure the company has adequate inventory and cash on hand. 
B) It captures the variable and fixed expenses of the business. 
C) It depicts the breakdown of sales based on terms of collection. 
D) It helps in planning to ensure the business has adequate cash. 
A) It aids in planning to ensure the company has adequate inventory and cash on hand. 
B) It captures the variable and fixed expenses of the business. 
C) It depicts the breakdown of sales based on terms of collection. 
D) It helps in planning to ensure the business has adequate cash.

Question 7

The most important part of a budgeting system is getting managers and employees to accept the budget.

Accepted Answer

A) True 
 B)False

Question 8

Morag Manufacturing Company's budgeted income statement includes the following data:
   
The budget assumes that 60% of commission expenses are paid in the month in which they are incurred and the remaining 40% are paid one month later.In addition,50% of salaries expenses are paid in the month in which they are incurred,and the remaining 50% are paid one month later.Miscellaneous expenses,rent expense,and utility expenses are assumed to be paid in the same month in which they are incurred.Insurance was prepaid for the year on January 1.Prepare a schedule of cash payments for selling and administrative expenses for the quarter ending June 30.

Accepted Answer

@#IMG-DLM& Insurance has alrea

Question 9

The Raw Materials Inventory account is must be considered when calculating the amount of materials to be purchased.

Accepted Answer

A) True 
 B)False

Question 10

Budgeted financial statements are financial statements based on budgeted amounts rather than actual amounts.

Accepted Answer

A) True 
 B)False

Question 11

The budgeted production of Taurus,Inc.is 14,000 units per month.Each unit requires 40 minutes of direct labor to complete.The direct labor rate is $90 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. )

Accepted Answer

A) $840,000 
B) $373,333 
C) $1,260,000 
D) $31,500 
A) $840,000 
B) $373,333 
C) $1,260,000 
D) $31,500

Question 12

The budgeted income statement is a cash-based income statement.

Accepted Answer

A) True 
 B)False

Question 13

In preparing the master budget,the manufacturing overhead is the last period cost to consider.

Accepted Answer

A) True 
 B)False

Question 14

June sales were $22,000,while projected sales for July and August were $45,000 and $63,000,respectively.Sales are 60% cash and 40% credit.All credit sales are collected in the month following the sale.Calculate expected collections for July.

Accepted Answer

A) $31,200 
B) $35,800 
C) $8,800 
D) $27,000 
A) $31,200 
B) $35,800 
C) $8,800 
D) $27,000

Question 15

Nobula Corp.is preparing their budget for the second quarter and provides the following data:
 
Assume that accounts payable pertains only to suppliers of 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 ________.

Accepted Answer

A) $23,400 
B) $9,600 
C) $9,200 
D) $13,800 
A) $23,400 
B) $9,600 
C) $9,200 
D) $13,800

Question 16

DGT Industries expects to sell 450 units of Product A and 400 units of Product B each day at an average price of $23 for Product A and $31 for Product B.The expected cost for Product A is 38% of its selling price and the expected cost for Product B is 60% of its selling price.DGT Industries has no beginning inventory,but it wants to have a four-day supply of ending inventory for each product.Compute the budgeted purchases for the next (seven-day)week.(Round the answer to the nearest dollar. )

Accepted Answer

A) $79,611 
B) $91,000 
C) $159,250 
D) $125,103 
A) $79,611 
B) $91,000 
C) $159,250 
D) $125,103

Question 17

Sensitivity analysis is a what-if technique.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

The manufacturing overhead budget calculates the budgeted overhead cost for the year and also the predetermined overhead allocation rate for the year.

Accepted Answer

A) True 
 B)False

Question 20

When preparing the operating budgets for a manufacturing company,the manufacturing overhead budget ________.

Accepted Answer

A) represents the last period cost to be considered 
B) only includes variable manufacturing overhead 
C) only computes the budgeted overhead cost for the year 
D) includes costs that are projected by the cost accountant and the production manager 
A) represents the last period cost to be considered 
B) only includes variable manufacturing overhead 
C) only computes the budgeted overhead cost for the year 
D) includes costs that are projected by the cost accountant and the production manager

Unlike a manufacturing company,the sales budget is the cornerstone for the master budget of a merchandising company.

The final step in the process of creating the master budget is the preparation of the ________.

Which of the following describes the cash budget?

The most important part of a budgeting system is getting managers and employees to accept the budget.

The Raw Materials Inventory account is must be considered when calculating the amount of materials to be purchased.

Budgeted financial statements are financial statements based on budgeted amounts rather than actual amounts.

The budgeted income statement is a cash-based income statement.

In preparing the master budget,the manufacturing overhead is the last period cost to consider.

June sales were $22,000,while projected sales for July and August were $45,000 and $63,000,respectively.Sales are 60% cash and 40% credit.All credit sales are collected in the month following the sale.Calculate expected collections for July.

Nobula Corp.is preparing their budget for the second quarter and provides the following data: Assume that accounts payable pertains only to suppliers of 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 ________.

Sensitivity analysis is a what-if technique.

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

The manufacturing overhead budget calculates the budgeted overhead cost for the year and also the predetermined overhead allocation rate for the year.

When preparing the operating budgets for a manufacturing company,the manufacturing overhead budget ________.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters

Exam 22: Master Budgets

Unlike a manufacturing company,the sales budget is the cornerstone for the master budget of a merchandising company.

The final step in the process of creating the master budget is the preparation of the ________.

Which of the following describes the cash budget?

The most important part of a budgeting system is getting managers and employees to accept the budget.

The Raw Materials Inventory account is must be considered when calculating the amount of materials to be purchased.

Budgeted financial statements are financial statements based on budgeted amounts rather than actual amounts.

The budgeted income statement is a cash-based income statement.

In preparing the master budget,the manufacturing overhead is the last period cost to consider.

June sales were $22,000,while projected sales for July and August were $45,000 and $63,000,respectively.Sales are 60% cash and 40% credit.All credit sales are collected in the month following the sale.Calculate expected collections for July.

Nobula Corp.is preparing their budget for the second quarter and provides the following data: Assume that accounts payable pertains only to suppliers of 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 ________.

Sensitivity analysis is a what-if technique.

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

The manufacturing overhead budget calculates the budgeted overhead cost for the year and also the predetermined overhead allocation rate for the year.

When preparing the operating budgets for a manufacturing company,the manufacturing overhead budget ________.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters