Exam 9: Budgeting, production, cash, and Master Budget

What budget shows depreciation expenses on sales equipment in a separate line?

Which of the following is characteristic of the master budget?

BacSac Company makes backpacks.Its production budget for two months is: BacSac uses two types of labour to make the backpacks: cutting labour and sewing labour.Each backpack requires 6 minutes,on average,of cutting labour.Each backpack requires 24 minutes of sewing labour. BacSac has fixed overhead of $4,400 per month and variable overhead of $3 per direct labour hour. Month Budgeted production in units June 35,000 July 50,000 A. How many hours of cutting labour are budgeted for July? B. How many hours of sewing labour are budgeted for July? C. What is the total amount of budgeted direct labour hours for July? D. What is the budgeted total overhead for the month of July?

Which is a characteristic of the master budget?

When preparing the direct labour budget,the number of hours worked by each employee is the only information needed.

Who is responsible for directing and coordinating an organization's overall process of budgeting?

Glouster Company makes power tools.The sales budget for drills for the first four months of the year is: Glouster has taken a just-in-time approach to production and wants only 5% of the next month's sales needs in ending inventory.January 1 inventory of drills was zero.Each drill takes 15 minutes of direct labour at $18 per hour.The factory overhead formula is $27,000 + $1.20 per direct labour hour. Month Unit Sales January 20,000 February 15,000 March 22,000 April 25,000 A. What is the budgeted production for January? B. What is the budgeted production for February? C. What is the budgeted production for the entire first quarter of the year? D. What is the budgeted direct labour cost for January? E. What is the budgeted direct labour cost for February? F. What is the budgeted variable overhead for March is? G. What is the budgeted total overhead for March?

Wallen Company estimated sales of 12,000 units at $44 each, unit cost of goods sold of $22, marketing expense of $70,000, and a 12% commission on the price for each unit sold. Administrative expense is budgeted at $50,000. -Refer to the Figure.What is Wallen's budgeted marketing expense?

Which of the following schedules shows the planned ending cash balance for the year?

Which of the following is NOT an advantage of participative budgeting?

The direct materials purchases budget is based on the production budget.

Shortie Company produces two products: X Brand and Y Brand. Budgeted sales for four months are as follows: Shortie's ending inventory policy is that X Brand should have 10% of its next month's sales in ending inventory and Y Brand should have 20% of next month's sales in its ending inventory. On May 1, Shortie's inventory had 1,000 units of X Brand and 9,000 units of Y Brand.Y Brand requires four units of component A. (X Brand does not use component A.) On May 1, 2,100 units of component A were in inventory. Shortie wants to have 30% of the following month's production needs in inventory for component a. X Brand Y Brand May 10,000 40,000 June 20,000 70,000 July 15,000 80,000 August 30,000 90,000 -Refer to the Figure.What is the desired ending inventory of component A for May?

For which of the following organizations is having a production budget most important?

The output of the cost of goods sold budget is entered into the pro forma income statement.

Identify each item as a component of one of the following budgets. -Sales in units

Yax Company expects sales of $40,000 in July,$50,000 in August,and $30,000 in September.Yax's experience is that 40% of sales are cash,and the remainder are on account.Accounts receivable are paid: 70% in the month of sale,and 25% in the following month. A. What are the expected cash receipts on accounts receivable in August for July sales? B. What are the expected cash receipts on accounts receivable in August for August sales? C. What are the total expected cash receipts on accounts receivable in August? D. What are the total expected cash receipts in August? E. How much of July sales are deemed to be uncollectible?

Planning is looking ahead to see what actions should be taken to avoid particular goals.

The master budget is composed of operating budgets and financial budgets.

Emerald Company budgeted the following production in units for the first quarter of the year: Each unit requires 3 kg of raw material. Emerald's policy is to have 20% of the following month's production needs for materials in inventory. On January 1, the raw materials inventory equalled 11,000 kg. January 30,000 February 20,000 March 40,000 -Refer to the Figure.What was the ending inventory for January in kilograms?

Identify each item as an advantage or disadvantage of budgeting. -Forces managers to plan