Exam 8: Budgeting for Planning and Control

Operating budgets are

Michael Corporation has the following sales forecasts for the first three months of 2006: Sixty-five percent of sales are collected in the month of the sale and the remainder are collected in the following month. Minimum cash balance is $20,000.Cash can be borrowed in $1,000 increments from the local bank (assume no interest charges).How much cash would be collected in March from sales?

The following forecasted sales pertain to Norah Company: The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 20 percent of the next month's sales. What is the budgeted beginning balance in units for finished goods inventory on June 1?

Figure 8-7 Schrandt Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget.Data for the July master budget are given below: The June 30th balance sheet follows: Actual sales for June and budgeted sales for July, August, and September are given below: Sales are 20 percent for cash and 80 percent on credit.All credit sales are collected in the month following the sale.There are no bad debts. The gross margin percentage is 40 percent of sales.The desired ending inventory is equal to 25 percent 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. -Refer to Figure 8-7.What are the total assets at the end of July?

Michael Corporation has the following sales forecasts for the first three months of 2006: Sixty-five percent of sales are collected in the month of the sale and the remainder are collected in the following month. 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?

Rydingsward, Inc., has done a cost analysis for its production of reflectors.The following activities and cost drivers have been developed: -What is the budget for maintenance if 20,000 reflectors were made that required 3,500 machine hours, 12 batches, and 5,000 purchase orders?

Harald, Inc., has done a cost analysis for its production of bumper stickers.The following activities and cost drivers have been developed: Following are the actual costs of producing 85,000 stickers: 5,000 machine hours; 10 batches; 20 purchase orders - What is the budget variance for machining in an activity-based performance report?

Which of the following is an operating budget?

Glenn, Inc., has done a cost analysis for its production of T-shirts.The following activities and cost drivers have been developed: Following are the actual costs of producing 75,000 T-shirts: 5,000 machine hours; 10 batches; 20 purchase orders -What is the budget variance for setups in an activity-based performance report?

Control can be defined as

Miller Corporation has the following sales budget for the first four months of 2011: Month Sales January $400,000 February 320,000 March 440,000 April 360,000 Historically, the following trend has been established regarding cash collection of sales: 65 percent in month of sale 25 percent in month following sale 8 percent in second month following sale 2 percent uncollectible The company allows a 2 percent cash discount for payments made by customers during the month of the sale.November and December sales were $400,000 and $240,000, respectively. Required: Prepare a schedule of budgeted cash collections from sales for January, February, and March.

A budget that is developed around one particular level of activity is

Figure 8-8 Armati, Inc., is looking for feedback on company performance.The company compares the budget for the year with the actual costs.Data have been collected below: Armati, Inc., had the following budgeted data: The following actually occurred: - Refer to Figure 8-8.The flexible budget for direct materials cost in 2011 is

Denver Corporation has the following sales forecast for the next quarter: July, 4,000 units; August, 4,800 units; September, 5,600 units Sales totaled 3,200 units in June.The June ending finished goods inventory was 800 units.End-of-month finished goods inventory levels are planned to be equal to 30 percent of the next month's planned sales. - The planned ending inventory of finished goods for August is

The following forecasted sales pertain to Norah Company: The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 20 percent of the next month's sales. How many units are expected to be produced in April?

Figure 8-8 Armati, Inc., is looking for feedback on company performance.The company compares the budget for the year with the actual costs.Data have been collected below: Armati, Inc., had the following budgeted data: The following actually occurred: -Refer to Figure 8-8.The static budget variance for supplies is

Figure 8-1 Canceco Company produces and sells pillows.It expects to sell 10,000 pillows in the year 2012 and had 1,000 pillows in finished goods inventory at the end of 2011.Canceco would like to complete operations in the year 2012 with at least 1,250 completed pillows in inventory.There is no ending work-in-process inventory.The pillows sell for $5 each. - Refer to Figure 8-1.How many pillows would be produced in the year 2012?

In a merchandising organization, the merchandise purchases budget replaces what budget from a manufacturing firm?

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

Figure 8-7 Schrandt Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget.Data for the July master budget are given below: The June 30th balance sheet follows: Actual sales for June and budgeted sales for July, August, and September are given below: Sales are 20 percent for cash and 80 percent on credit.All credit sales are collected in the month following the sale.There are no bad debts. The gross margin percentage is 40 percent of sales.The desired ending inventory is equal to 25 percent 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. - Refer to Figure 8-7.What is the balance of the inventory account at the end of July?