Exam 23: Master Budgets and Planning

A plan that shows the expected cash inflows and cash outflows during the budget period, including receipts from loans needed to maintain a minimum cash balance and repayments of such loans, is called a(n):

There are three major subgroups of the master budget. These are _______________________, __________________, and ______________________.

A master budget refers to a company's sales budget that includes all of its segments or departments.

Del Carpio, Inc., sells two products, Widgets and Gadgets. The sales forecast in units for the first quarter of the coming year is: Cash sales are 30% of each product's monthly sales. The remaining sales are credit sales which are collected as follows: 70% in the month of sale, 20% the next month, and 10% in the following month. Unit sale prices are $30 and $20 for Widgets and Gadgets, respectively. Determine the company's cash receipts for March from its current and past sales.

Assuming a bottom-up process of budget development, which of the following should be initially responsible for developing sales estimates?

Lara Company's budget includes the following credit sales for the current year: September, $25,000; October, $36,000; November, $30,000; December, $32,000. Experience has shown that payment for the credit sales is received as follows: 15% in the month of sale, 60% in the first month after sale, 20% in the second month after sale, and 5% is uncollectible. How much cash can Lara Company expect to collect in November as a result of current and past credit sales?

___________________________ is a budget system based on expected activities and their levels that enables management to plan for resources required to perform the activities.

Financial budgets are normally completed after preparation of operating and capital expenditure budgets.

A company's history indicates that 20% of its sales are for cash and the rest are on credit. Collections on credit sales are 30% in the month of the sale, 50% in the next month, and 15% the following month. Projected sales for January, February, and March are $60,000, $85,000 and $95,000, respectively. The March expected cash receipts from all current and prior credit sales is:

The usual budget period is:

A capital expenditures budget is prepared before the operating budgets.

A plan that lists the types and amounts of selling expenses expected during the budget period is called a(n):

Describe at least five benefits of budgeting.

Which of the following budgets is not an operating budget?

The master budget is a small component of the comprehensive budget.

The usual starting point for preparing a master budget is forecasting or estimating:

Production budgets should always show both budgeted units of product and costs.

A managerial accounting report that presents predicted amounts of the company's assets, liabilities, and equity as of the end of the budget period is called a(n):

Airtex Company budgeted the following credit sales during the current year: September, $90,000; October, $123,000; November, $105,000; December, $111,000. Experience has shown that cash from credit sales is received as follows: 10% in the month of sale, 50% in the first month after sale, 35% in the second month after sale, and 5% is uncollectible. How much cash should Airtex Company expect to collect in November from all current and past credit sales?

A plan that shows the predicted costs for direct materials, direct labor, and overhead to be incurred in manufacturing the units in the production budget is called the: