Question 1

Identify each item as a component of one of the following budgets.
-Unit selling price

Accepted Answer

A) Production budget 
B) Direct materials purchases budget 
C) Sales budget 
A) Production budget 
B) Direct materials purchases budget 
C) Sales budget

Question 2

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. $$\begin{array} { l l } 
\text { July } & 80,000 \
\text { August } & 90,000 \
\text { September } & 70,000
\end{array}$$
-Refer to the Figure.How many kilograms of peppers will be purchased during the month of August?

Accepted Answer

A) 19,925 
B) 21,950 
C) 22,250 
D) 23,375 
A) 19,925 
B) 21,950 
C) 22,250 
D) 23,375

Question 3

Long & Short Company developed the following data for the month of June.
1.June 1 cash balance $2,300.
2.Cash sales in June $67,000.
3.Credit sales for June are $20,000; for May $10,000; and for April $16,000.Credit sales are collected as follows: 60% in the month of sale,20% in the following month,and 10% in the second month following the sale.
4.Purchases for May were $34,000 and for June are $40,000.Half of purchases are paid in the month of purchase and the remainder in the following month.
5.June salaries are $28,400,utilities are $1,090,and depreciation on the building is $1,000.
 A. What are the anticipated cash receipts from accounts receivable in June?
B. What is the anticipated total cash available in June?
C. What are the June cash payments for purchases?
D. What is the anticipated cash balance on June 30 ?

Accepted Answer

The answer of Long & Short Company developed the following...

Question 4

Stumble Inc. plans to sell 100,000 units in March and 140,000 units in April. Stumble Inc.'s policy is that 15% of the following month's sales must be in ending inventory. On March 1, 13,400 units were in inventory.
It takes 15 minutes of direct labour time to make one unit. Direct labour wages average $20 per hour. Variable overhead is applied at the rate of $3 per direct labour hour. Fixed overhead is budgeted at $44,500 per month.
-Refer to the Figure.What is the direct labour cost budgeted for March?

Accepted Answer

A) $26,900 
B) $107,600 
C) $322,800 
D) $538,000 
A) $26,900 
B) $107,600 
C) $322,800 
D) $538,000

Question 5

Boxes R Us Corporation manufactures boxes.The estimated number of boxes sold for the first three months of the year is as follows: Finished goods inventory at the end of December was 900 units.Ending finished goods inventory is equal to 20% of the next month's sales.Boxes R Us Corporation expects to sell the boxes for $5 each.April sales are projected at 4,500 boxes.How many boxes should be produced in February?
$\begin{array}{ll}
\text { Month } & \text { Sales } \
\text { January } & 3,000 \
\text { February } & 4,200 \
\text { March } & 3,900
\end{array}$

Accepted Answer

A) 3,900 boxes 
B) 4,140 boxes 
C) 4,200 boxes 
D) 4,260 boxes 
A) 3,900 boxes 
B) 4,140 boxes 
C) 4,200 boxes 
D) 4,260 boxes

Question 6

The selling and administrative expense budgets are part of the financial budgets.

Accepted Answer

A) True 
 B)False

Question 7

Miso Company makes all its sales on account. Accounts receivable payment experience is as follows:
Miso provided information on sales as follows:
 $\begin{array}{lr}
\text { Percent paid in the month of sale } & 30 \% \
\text { Percent paid in the month after the sale } & 60 \% \
\text { Percent paid in the second month after the sale } & 8 \%
\end{array}$ $\begin{array}{ll}
\text { May } & \$ 100,000 \
\text { June } & \$ 120,000 \
\text { July } & \$ 130,000 \
\text { August (expected) } & \$ 150,000
\end{array}$
-Refer to the Figure.What dollar value of May's sales is expected to be uncollectible?

Accepted Answer

A) $0 
B) $2,000 
C) $2,500 
D) $7,200 
A) $0 
B) $2,000 
C) $2,500 
D) $7,200

Question 8

BCB Company budgeted 250,000 units for June,240,000 units for July,and 350,000 units for August.Each unit requires 0.35 direct labour hours.How many direct labour hours are budgeted for August?

Accepted Answer

A) 5,000 
B) 50,000 
C) 52,500 
D) 122,500 
A) 5,000 
B) 50,000 
C) 52,500 
D) 122,500

Question 9

Which of the following is a result of participative budgeting?

Accepted Answer

A) pseudoparticipation 
B) set goals that are either too high or too low 
C) slack built into the budget 
D) goal congruence 
A) pseudoparticipation 
B) set goals that are either too high or too low 
C) slack built into the budget 
D) goal congruence

Question 10

There are as many direct materials purchases budgets as there are products.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements depicts an aspect of the master budget?

Accepted Answer

A) The overhead budget is typically composed exclusively of variable overhead. 
B) The direct labour budget uses an average wage rate for direct labour. 
C) The production budget is converted into dollars. 
D) The sales budget includes not stated both units and dollars. 
A) The overhead budget is typically composed exclusively of variable overhead. 
B) The direct labour budget uses an average wage rate for direct labour. 
C) The production budget is converted into dollars. 
D) The sales budget includes not stated both units and dollars.

Question 12

The sales budget is prepared in units only,not dollars.

Accepted Answer

A) True 
 B)False

Question 13

Miso Company makes all its sales on account. Accounts receivable payment experience is as follows:
Miso provided information on sales as follows:
 $\begin{array}{lr}
\text { Percent paid in the month of sale } & 30 \% \
\text { Percent paid in the month after the sale } & 60 \% \
\text { Percent paid in the second month after the sale } & 8 \%
\end{array}$ $\begin{array}{ll}
\text { May } & \$ 100,000 \
\text { June } & \$ 120,000 \
\text { July } & \$ 130,000 \
\text { August (expected) } & \$ 150,000
\end{array}$
-Refer to the Figure.What cash is budgeted to be collected on account in August?

Accepted Answer

A) $45,000 
B) $54,600 
C) $132,000 
D) $132,600 
A) $45,000 
B) $54,600 
C) $132,000 
D) $132,600

Question 14

When generating a master budget,what is the schedule created first?

Accepted Answer

A) production budget 
B) direct labour budget 
C) cash budget 
D) sales budget 
A) production budget 
B) direct labour budget 
C) cash budget 
D) sales budget

Question 15

Which of the following does traditional organization theory use to motivate workers?

Accepted Answer

A) bonuses 
B) self-esteem 
C) the nature of the work itself 
D) increased responsibility 
A) bonuses 
B) self-esteem 
C) the nature of the work itself 
D) increased responsibility

Question 16

If the initial cash budget indicates a cash deficiency,the company must go out of business.

Accepted Answer

A) True 
 B)False

Question 17

Lube-Fast provides oil changes and lubes.The estimated number of oil changes for April and May are 3,600 and 4,000.Each oil change takes 12 minutes of direct labour.The wage rate is $10 per hour.Overhead is $3,700 per month and $2 per oil change.
 A. What is the budgeted direct labour for April?
B. What is the budgeted direct labour for May?
C. What is the budgeted overhead for April?
D. What is the budgeted overhead for May?

Accepted Answer

The answer of Lube-Fast provides oil changes and lubes.The estimated...

Question 18

A continuous budget is a static 15-month budget.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is a characteristic of budgets?

Accepted Answer

A) They are key components of recording a financial history. 
B) They reflect on financial plans of the past. 
C) They are identifiers of objectives and the actions needed to achieve them. 
D) They are created once during the life of the business. 
A) They are key components of recording a financial history. 
B) They reflect on financial plans of the past. 
C) They are identifiers of objectives and the actions needed to achieve them. 
D) They are created once during the life of the business.

Question 20

Hoovern Company provided the following data for May: What is the cost of goods sold?
$$\begin{array} { l l } 
\text { Direct materials } & \$ 60,000 \
\text { Direct labour } & \$ 30,000 \
\text { Overhead } & \$ 80,000 \
\text { Beginning finished goods } & \$ 15,000 \
\text { Ending finished goods } & \$ 34,000 \
\text { Production in units } & 10,000
\end{array}$$

Accepted Answer

A) $75,000 
B) $151,000 
C) $165,000 
D) $184,000 
A) $75,000 
B) $151,000 
C) $165,000 
D) $184,000

Identify each item as a component of one of the following budgets. -Unit selling price

The selling and administrative expense budgets are part of the financial budgets.

BCB Company budgeted 250,000 units for June,240,000 units for July,and 350,000 units for August.Each unit requires 0.35 direct labour hours.How many direct labour hours are budgeted for August?

Which of the following is a result of participative budgeting?

There are as many direct materials purchases budgets as there are products.

Which of the following statements depicts an aspect of the master budget?

The sales budget is prepared in units only,not dollars.

When generating a master budget,what is the schedule created first?

Which of the following does traditional organization theory use to motivate workers?

If the initial cash budget indicates a cash deficiency,the company must go out of business.

A continuous budget is a static 15-month budget.

Which of the following is a characteristic of budgets?

Hoovern Company provided the following data for May: What is the cost of goods sold? Direct materials \ 60,000 Direct labour \ 30,000 Overhead \ 80,000 Beginning finished goods \ 15,000 Ending finished goods \ 34,000 Production in units 10,000

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters

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

Identify each item as a component of one of the following budgets. -Unit selling price

The selling and administrative expense budgets are part of the financial budgets.

BCB Company budgeted 250,000 units for June,240,000 units for July,and 350,000 units for August.Each unit requires 0.35 direct labour hours.How many direct labour hours are budgeted for August?

Which of the following is a result of participative budgeting?

There are as many direct materials purchases budgets as there are products.

Which of the following statements depicts an aspect of the master budget?

The sales budget is prepared in units only,not dollars.

When generating a master budget,what is the schedule created first?

Which of the following does traditional organization theory use to motivate workers?

If the initial cash budget indicates a cash deficiency,the company must go out of business.

A continuous budget is a static 15-month budget.

Which of the following is a characteristic of budgets?

Hoovern Company provided the following data for May: What is the cost of goods sold? Direct materials \ 60,000 Direct labour \ 30,000 Overhead \ 80,000 Beginning finished goods \ 15,000 Ending finished goods \ 34,000 Production in units 10,000

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Job-Order Costing

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters