Question 1

For manufacturing companies,the primary source of cash is from its customers.

Accepted Answer

A) True 
 B)False

Question 2

Scotch,Inc.has prepared the operating budget for the first quarter of the year.The company forecast sales of $45,000 in January,$55,000 in February,and $65,000 in March.Variable and fixed expenses are as follows:
Variable Expenses:
Power cost (40% of sales)
Miscellaneous expenses: (15% of sales)
Fixed Expenses:
Salaries expense: $10,000 per month
Rent expense: $5,000 per month
Depreciation expense: $1,200 per month
Power cost/fixed portion: $800 per month
Miscellaneous expenses/fixed portion: $1,200 per month
Using the information above,calculate the amount of selling and administrative expenses for the month of February.

Accepted Answer

A) $42,950 
B) $53,950 
C) $30,250 
D) $48,450 
A) $42,950 
B) $53,950 
C) $30,250 
D) $48,450

Question 3

Blake Sodas,Inc.has budgeted direct materials inventory purchases as follows:
October: $345,000
November: $370,000
December: $440,000
Blake Sodas,Inc.pays for 10% of their purchases during the month of purchase,70% during the month following the purchase,and the remaining 20% two months after the month of purchase.What is the budgeted accounts payable balance on December 31?

Accepted Answer

A) $396,000 
B) $470,000 
C) $440,000 
D) $433,000 
A) $396,000 
B) $470,000 
C) $440,000 
D) $433,000

Question 4

Purchases equals cost of goods sold plus beginning merchandise inventory minus ending merchandise inventory.

Accepted Answer

A) True 
 B)False

Question 5

Tortilla Corp.has provided a part of its budget for the second quarter:
 
The cash balance on April 1 is $14,000.Assume that there will be no financing transactions or costs during the quarter.Calculate the projected cash balance at the end of May.

Accepted Answer

A) $51,800 
B) $69,800 
C) $54,000 
D) $18,000 
A) $51,800 
B) $69,800 
C) $54,000 
D) $18,000

Question 6

General,Inc.has prepared the following direct materials purchases budget:
 
All purchases are paid for as follows: 10% in the month of purchase,50% in the following month,and 40% two months after purchase.Calculate budgeted balance of accounts payable at the end of October.

Accepted Answer

A) $69,120 
B) $100,240 
C) $31,120 
D) $61,840 
A) $69,120 
B) $100,240 
C) $31,120 
D) $61,840

Question 7

Acme,Inc.has prepared its third quarter budget and provided the following data:
 
The cash balance on June 30 is projected to be $4,300.The company has to maintain a minimum cash balance of $5,000 and is authorized to borrow at the end of each month to make up any shortfalls.It may borrow in increments of $5,000 and has to pay interest every month at an annual rate of 5%.All financing transactions are assumed to take place at the end of the month.The loan balance should be repaid in increments of $5,000 whenever there is surplus cash.How much will the company have to borrow at the end of July?

Accepted Answer

A) $0 
B) $5,000 
C) $15,000 
D) $10,000 
A) $0 
B) $5,000 
C) $15,000 
D) $10,000

Question 8

The budgeted income statements of both manufacturing and merchandising companies include the calculation of gross profit.

Accepted Answer

A) True 
 B)False

Question 9

When a company is preparing a budgeted statement of cash flows,the payments to suppliers for purchases of direct materials can be obtained from the ________.

Accepted Answer

A) cash budget 
B) sales budget 
C) production budget 
D) budgeted balance sheet 
A) cash budget 
B) sales budget 
C) production budget 
D) budgeted balance sheet

Question 10

To calculate budgeted direct labor costs,multiply the number of units to be produced by the number of projected direct labor hours.Next,multiply that total by the average direct cost per hour.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is an example of the coordination and communication function of the budgeting process?

Accepted Answer

A) A budget demands integrated input from different business units and functions. 
B) Employees are motivated to achieve the goals set by the budget. 
C) Each department acts independently because the department manager will be evaluated on actual departmental results. 
D) A budget adjustment in one department will have no effect on other departments. 
A) A budget demands integrated input from different business units and functions. 
B) Employees are motivated to achieve the goals set by the budget. 
C) Each department acts independently because the department manager will be evaluated on actual departmental results. 
D) A budget adjustment in one department will have no effect on other departments.

Question 12

Zale,Inc.has provided the following extracts from their budget for the first quarter of the forthcoming year:
 
The company collects 70% of credit sales in the same month and the balance in the next month.Calculate the collections from the customers for the month of February.

Accepted Answer

A) $456,000 
B) $432,000 
C) $552,000 
D) $600,000 
A) $456,000 
B) $432,000 
C) $552,000 
D) $600,000

For manufacturing companies,the primary source of cash is from its customers.

Purchases equals cost of goods sold plus beginning merchandise inventory minus ending merchandise inventory.

Tortilla Corp.has provided a part of its budget for the second quarter: The cash balance on April 1 is $14,000.Assume that there will be no financing transactions or costs during the quarter.Calculate the projected cash balance at the end of May.

General,Inc.has prepared the following direct materials purchases budget: All purchases are paid for as follows: 10% in the month of purchase,50% in the following month,and 40% two months after purchase.Calculate budgeted balance of accounts payable at the end of October.

The budgeted income statements of both manufacturing and merchandising companies include the calculation of gross profit.

When a company is preparing a budgeted statement of cash flows,the payments to suppliers for purchases of direct materials can be obtained from the ________.

To calculate budgeted direct labor costs,multiply the number of units to be produced by the number of projected direct labor hours.Next,multiply that total by the average direct cost per hour.

Which of the following is an example of the coordination and communication function of the budgeting process?

Zale,Inc.has provided the following extracts from their budget for the first quarter of the forthcoming year: The company collects 70% of credit sales in the same month and the balance in the next month.Calculate the collections from the customers for the month of February.

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

For manufacturing companies,the primary source of cash is from its customers.

Purchases equals cost of goods sold plus beginning merchandise inventory minus ending merchandise inventory.

Tortilla Corp.has provided a part of its budget for the second quarter: The cash balance on April 1 is $14,000.Assume that there will be no financing transactions or costs during the quarter.Calculate the projected cash balance at the end of May.

General,Inc.has prepared the following direct materials purchases budget: All purchases are paid for as follows: 10% in the month of purchase,50% in the following month,and 40% two months after purchase.Calculate budgeted balance of accounts payable at the end of October.

The budgeted income statements of both manufacturing and merchandising companies include the calculation of gross profit.

When a company is preparing a budgeted statement of cash flows,the payments to suppliers for purchases of direct materials can be obtained from the ________.

To calculate budgeted direct labor costs,multiply the number of units to be produced by the number of projected direct labor hours.Next,multiply that total by the average direct cost per hour.

Which of the following is an example of the coordination and communication function of the budgeting process?

Zale,Inc.has provided the following extracts from their budget for the first quarter of the forthcoming year: The company collects 70% of credit sales in the same month and the balance in the next month.Calculate the collections from the customers for the month of February.

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