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Exam 22: Budgeting

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Question 71

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Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $250,000, $320,000, and $410,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale and 30% in the month following the sale.​ -The cash collections in November are

A) $317,750
B) $389,750
C) $490,000
D) $410,000

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

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Question 72

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To meet projected annual sales, Bluegill Manufacturers, Inc. needs to produce 75,000 machines for the year. The estimated January 1 inventory is 7,000 units, and the desired December 31 inventory is 12,000 units. What are projected sales units for the year?

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Question 73

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Below is budgeted production and sales information for Bluebird Company for the month of December. The unit selling price for Product XXX is $5 and for Product ZZZ is $14.​ -An October sales forecast projects 7,000 units are going to be sold at a price of $11.50 per unit. The desired ending inventory in units is 15% higher than the beginning inventory of 1,000 units. Total October sales are anticipated to be

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.​ -Stephanie Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 108,000 units, and desired ending inventory is 90,000 units. The quantities of direct materials expected to be used for each unit of finished product are given below.​ Material A 0.50 lb. per unit @ $0.70 per pound Material B 1.00 lb. per unit @ $1.70 per pound Material C 1.20 lbs. per unit @ $1.00 per pound The dollar amount of Material A used in production during the year is

At the beginning of the period, the Cutting Department budgeted direct labor of $30,000 and supervisor salaries of $20,000 for 3,000 hours of production. The department actually completed 5,000 hours of production. Determine the budget for the department assuming that it uses flexible budgeting.

Big Wheel, Inc., collects 25% of its sales on account in the month of the sale and 75% in the month following the sale. Sales on account are budgeted to be $150,000 for March and receipts from sales on account total $162,500 in April. What are the budgeted sales on account for April?

A capital expenditures budget is prepared before the operating budgets.

The sales budget is derived from the production budget.

The budget procedure that requires managers to estimate sales, production, and other operating data as though operations were being started for the first time is called zero-based budgeting.

Next year's sales forecast shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12 per unit, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units. The desired ending inventory of Product B is 3,000 units. -Woodpecker Co. has $296,000 in accounts receivable on January 1. Budgeted sales for January are $860,000. Woodpecker Co. expects to sell 20% of its merchandise for cash. Of the remaining 80% of sales on account, 75% are expected to be collected in the month of sale and the remainder the following month. The January cash collections from sales are

Production estimates for July for Starling Co. are as follows: For each unit produced, the direct materials requirements are as follows: Material A ($5 per lb.) 3.0 lbs.Material B ($18 per lb.) 0.5 lb.​ -The number of pounds of Materials A and B required for July production is

The sales budget is the starting point for preparation of the direct labor cost budget.

Diamond Company manufactures two models of cassette recorders: VCH and MTV. Based on the following production data for April, prepare a production budget.

The primary budget in nonmanufacturing businesses is the staffing budget.

The production budget is used to prepare which of the following budgets?

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

Match each phrase that follows with the term (a-f) it describes. -A plan that lists dollar amounts to be spent on purchasing additional fixed assets to carry out the budgeted business activities A)Budget B)Capital expenditures budget C)Sales budget D)Production budget E)Cash budget F)Budgeted balance sheet

Osprey Cycles, Inc. projected sales of 75,000 bicycles for the year. The estimated January 1 inventory is 5,000 units, and the desired December 31 inventory is 8,000 units. What is the budgeted production (in units) for the year?

Next year's sales forecast shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12 per unit, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units. The desired ending inventory of Product B is 3,000 units. -Gilbert's expects its September sales to be 20% higher than its August sales of $150,000. Manufacturing costs were $100,000 in August and are expected to be $120,000 in September. All sales are on credit and are collected as follows: 30% in the month of the sale and 70% in the following month. Payments of manufacturing costs are as follows: 25% in the month of production and 75% in the following month. The beginning cash balance on September 1 is $7,500. The ending balance on September 30 would be

At the beginning of the period, the Molding Department budgeted direct labor of $33,000 and supervisor salaries of $24,000 for 3,000 hours of production. The department actually completed 2,500 hours of production. Determine the budget for the department assuming that it uses flexible budgeting.