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Exam 21: Budgeting

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Question 71

Multiple Choice

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If the expected sales volume for the current period is 7,000 units, the desired ending inventory is 400 units, and the beginning inventory is 400 units, the number of units set forth in the production budget, representing total production for the current period, is

A) 6,700
B) 7,400
C) 7,100
D) 7,000

E) A) and B)
F) A) and C)

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Question 72

Multiple Choice

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At the beginning of the period, the Assembly Department budgeted direct labor of $110,000, direct materials of $170,000, and fixed factory overhead of $28,000 for 8,000 hours of production. The department actually completed 10,000 hours of production. What is the appropriate total budget for the department, assuming it uses flexible budgeting?

A) $288,000
B) $305,000
C) $350,000
D) $378,000

E) None of the above
F) All of the above

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Question 73

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Supervisor salaries, maintenance, and indirect factory wages would normally appear in the factory overhead cost budget.

-What is the budgeted unit of production for March?

A variant of fiscal-year budgeting whereby a twelve-month projection into the future is maintained at all times is termed

The responsibility for coordinating the preparation of a master budget should be assigned to the CEO of a firm.

Describe a master budget and the sequence in which the individual budgets within the master budget are prepared.

Based on the following production and sales data of Frixion Co. for March of the current year, prepare a) a sales budget and b) a production budget.

The master budget of a small manufacturer would normally include all necessary component budgets except the budgeted balance sheet.

Below is budgeted production and sales information for Flushing Company for the month of December: The unit selling price for product XXX is $5 and for product ZZZ is $15. -Budgeted production for product ZZZ during the month is

A formal written statement of management's plans for the future, expressed in financial terms, is a

Consider Derek's budget information: materials to be used totals $64,750; direct labor totals $198,400; factory overhead totals $394,800; work in process inventory January 1, $189,100; and work in progress inventory on December 31, $197,600. What is the budgeted cost of goods manufactured for the year?

The cash collections expected in September from accounts receivable are estimated to be

The budgeting process is used to effectively communicate planned expectations regarding profits and expenses to the entire organization.

Future Technologies projected sales of 35,000 computers for this year. The estimated January 1 inventory is 3,000 units, and the desired December 31 inventory is 9,000 units. What is the budgeted production in units) for the year?

The cash collections in November are

The budgeted balance sheet assumes that all operating and financing plans are met.

The master budget of a small manufacturer would normally include all component budgets that impact on the financial statements.

The treasurer of Calico Dreams Company has accumulated the following budget information for the first two months of the coming fiscal year: The company expects to sell about 35% of its merchandise for cash. Of sales on account, 80% are collected in full in the month of the sale, and the remainder in the month following the sale. One-fourth of the manufacturing costs are paid in the month in which they are incurred, and the other three-fourths in the following month. Depreciation, insurance, and property taxes represent $6,400 of the monthly selling and administrative expenses. Insurance is paid in February, and property taxes are paid yearly in September. A $40,000 installment on income taxes is to be paid in April. Of the remainder of the selling and administrative expenses, one-half are to be paid in the month in which they are incurred and the balance in the following month. Capital additions of $250,000 are paid in March. Current assets as of March 1 are composed of cash of $45,000 and accounts receivable of $51,000. Current liabilities as of March 1 are accounts payable of $121,500 $102,000 for materials purchases and $19,500 for operating expenses). Management desires to maintain a minimum cash balance of $25,000. Prepare a monthly cash budget for March and April.

As of January 1 of the current year, the Grayson Company had accounts receivables of $40,000. The sales for January, February, and March were as follows: $120,000, $140,000, and $150,000, respectively. Of each month's sales, 20% are for cash. Of the remaining 80% the credit sales) , 60% are collected in the month of sale, with the remaining 40% collected in the following month. What is the total cash collected both from accounts receivable and for cash sales) in the month of January?