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

What budgets are needed to calculate a budgeted unit cost?

Calino Company developed the following data for the month of August. 1.August 1 cash balance $12,300. 2.Cash sales in August $80,000. 3.Credit sales for August are $30,000; for July $40,000; and for June $40,000.70% of credit sales are collected in the month of sale,15% in the following month,and 10% in the second month following the sale. 4.Purchases for July were $50,000 and for August are $40,000.One-fourth of purchases are paid in the month of purchase,and the remaining three-quarters in the following month. 5.August salaries are $31,400,utilities are $3,220,and depreciation on the building and equipment is $10,000. A. What are the anticipated cash receipts from accounts receivable in August? B. What is the anticipated total cash available from all sources in August? C. What are the August cash payments for purchases made in July and August? D. What is the anticipated cash balance on August 31 ?

Bingimton Company provided the following information for last month.There were no beginning and ending inventories. Production in units 1,000 Direct materials cost \ 3,000 Direct labour cost \ 4,000 Overhead cost \ 7,600 Sales commission per unit sold \ 2 Price per unit sold \ 24 Fixed selling and admini strative expense \ 5,000 -Refer to the Figure.What was the gross profit for Bingimton Company last month?

Which statement best depicts the master budget?

Treetop Company,an importer and retailer of pottery and kitchenware,prepares a monthly master budget.Data for the July master budget are given below: The June 30 balance sheet follows: Actual sales for June and budgeted sales for July,August,and September are given below: Cash \ 25,000 Accounts payable \ 45,000 Accounts receivable 110,000 Capital stock 300,000 Inventory 54,000 Retained earnings 94,000 Buil ding and equipment (net) 250,000 Sales are 20% in cash and 80% on credit.All credit sales are collected in the month following the sale.There are no bad debts. The gross margin percentage is 40% of sales.The desired ending inventory is equal to 25% of the following month's sales.One-fourth of the purchases are paid for in the month of purchase,and the others are purchased on account and paid in full the following month. The monthly cash operating expenses are $43,000,and the monthly depreciation expenses are $7,000. What is the balance of the accounts receivable at the end of July? June \ 137,500 July 360,000 August 400,000 September 320,000

Identify each item as either part of the operating budget or the financial budget. -Budgeted capital expenditures

Identify each item as either part of the operating budget or the financial budget. -Ending finished goods inventory budget

A firm should develop a strategic plan after preparing a budget.

Flight Company makes luggage.One popular model is the Traveller (a 50 cm wheeled carry-on).Budgeted sales for this model are: Desired ending inventory is 20% of the next month's sales.Inventory on March 1 is 3,500 units.Prepare a production budget for as many months as possible. Month Unit Sales March 28,000 April 35,000 May 48,000 June 80,000

A company has had stable sales and production for several years.Next year,sales are expected to increase by at least 50%.Assume that the company maintains its policy for desired ending inventories of finished product and direct materials purchases.What will be the likely effect on the desired ending inventory of finished product?

Bortolli Company manufactures pasta bowls. Production of bowls for the coming three months is budgeted as follows: Each bowl requires 45 minutes of direct labour time. Direct labour wages average $20 per hour. Monthly overhead averages $4 per direct labour hour plus fixed overhead of $2,100. May 20,000 June 30,000 July 35,000 -Refer to the Figure.What is the direct labour cost budgeted for June?

Identify each item as an advantage or disadvantage of budgeting. -Provides standard for performance evaluation

Identify each item as an advantage or disadvantage of budgeting. -Improves communication and coordination

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 November?

Which action would management take if the company anticipates selling $200,000 of goods,of which $20,000 will probably be uncollectible?

Which budget is the first one that must be done in the master budgeting process,and why?

Which of the following budgets would be most important to bank loan officers when determining whether to give a company a loan?

What budget shows a company's planned borrowings and repayments?

Monetary incentives include job satisfaction,increased responsibility,and firm recognition of a job well done.

Bright Lights Company manufactures lamps.The estimated lamp sales for the last three months of the current year are as follows: Finished goods inventory at the end of September was 3,000 units.Ending finished goods inventory is budgeted to equal 25% of the next month's sales.Bright Lights expects to sell the lamps for $25 each.The first three months of the next year's sales are projected at 16,000 lamps.How many lamps should be produced in November? Month Sales October 10,000 November 13,000 December 15,000