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

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.How many kilograms of raw materials purchases were budgeted for in February?

Doitall Company makes all its sales on account. Doitall's accounts receivable payment experience is as follows: Doitall provided information on sales as follows: Percent paid in the month of sale 18\% Percent paid in the month after the sale 77\% Percent paid in the second month after the sale 3\% September \ 120,000 October \ 150,000 November \ 220,000 December (expected) \ 250,000 -Refer to the Figure.What are the expected cash receipts for December?

A large difference between actual and planned results is feedback that the system is providing adequate control.

What is the formula to compute the units to be produced?

Identify each item as either part of the operating budget or the financial budget. -Budgeted balance sheet

Sleep Country Company produces and sells pillows.It expects to sell 10,000 pillows the coming year,and it had 1,000 pillows in the finished goods inventory at the end last year.Sleep Country would like to complete operations in the coming year with at least 1,250 completed pillows in inventory.There is no ending work-in-process inventory.The pillows sell for $5 each.How many pillows should be produced in the coming year?

What does the selling and administrative expenses budget include?

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 operating income?

Identify each item as a component of one of the following budgets. -Units to be sold

Pseudoparticipation is one of the potential problems with participative budgeting.

Southern Inc. produces a line of salsas. Southern Inc. estimated production of jars of salsa for the third quarter of the year is as follows: Each jar requires 0.25 kg of peppers. Southern Inc. prefers to buy the freshest peppers, so its policy is to have just 5% of the following month's production needs in ending inventory. On July 1, the company had 1,200 kg of peppers in inventory. Southern Inc. pays $0.40 per kilogram of peppers. It buys all peppers on account and typically pays 50% of a month's purchases in that month, and the remaining 50% the following month. July 80,000 August 90,000 September 70,000 -Refer to the Figure.What is the cost in dollars of purchases for July?

Which budget describes how many units must be made to meet sales needs and ending inventory objectives?

BoomBoom Company produces speaker systems for trucks. BoomBoom expects to sell 20,000 units in January, 25,000 units in February, and 22,000 units in March. Each unit is priced at $45. BoomBoom's desired ending inventory is 25% of the following month's sales. That requirement was met on January 1. Each speaker system requires two boxes and 10 metres of wire. Boxes cost $5 each, and wire is $0.90 per metre. BoomBoom's desired ending raw materials inventory is 30% of the following month's production needs. On January 1, BooBoom had 9,000 boxes and 100,000 metres of wire in inventory. -Refer to the Figure.How many units does BoomBoom expect to produce in February?

Identify each item as a component of one of the following budgets. -Ending inventory of product

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.How many units of X Brand are budgeted for production in May?

What is the calculation for the direct materials needed for production?

Which of the following appears on the budgeted balance sheet?

Kneeling Corporation has the following sales forecasts for the first three months of the current year: In the month of the sale 65% of sales are collected,and the remainder is collected in the following month. Month Sales January \ 36,000 February 24,000 March 40,000 What is the cash balance at the end of January,assuming that cash is received only from customers and that $48,000 is paid out during January? Accounts receivable balance (January 1) \ 22,800 Cash balance (January 1) 30,000 Minimum cash balance needed 20,000

Rival Company purchases merchandise on account.In general,Rival pays 50% in the month of purchase and 50% in the following month.All payments in the month of purchase qualify for a 2% cash discount.First quarter budgeted purchases are: January \ 90,000 February 80,000 March 96,000

Braham's Bottling Company sells fruit-flavoured colas.Estimated sales in cartons for September,June,and July are 1,000,3,000,and 5,000,respectively.The price is forecast at $5 per carton.Braham's requires that finished goods ending inventory be 20% of the next month's sales.Inventory was 500 units on September 1.Each carton requires 12 mL of fruit syrup and 130 mL of carbonated water.Materials ending inventory is 10% of the next month's production needs.September 1 inventory met that requirement. A. What is the budgeted revenue for September? B. What is the budgeted revenue for November? C. Production in September is how many cartons? D. Production in October is how many cartons? E. Purchases of syrup in September is how many mL? F. Purchases of carbonated water in September is how many mL?