Question 1

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

Accepted Answer

A)  $246,400
B)  $262,500
C)  $210,000
D)  $294,500E) C) and D)
F) B) and C)

Question 2

Match each phrase that follows with the term a-e it describes.
-begins by estimating the quantity of sales

Accepted Answer

A)  planning
B)  directing
C)  controlling
D)  budget slack
E)  goal conflictF) A) and D)
G) A) and C)

Question 3

If the expected sales volume for the current period is 9,000 units, the desired ending inventory is 200 units, and the beginning inventory is 300 units, the number of units set forth in the production budget, representing total production for the current period, is

Accepted Answer

A)  9,000
B)  8,900
C)  8,700
D)  9,100E) A) and B)
F) All of the above

Question 4

The total direct materials purchases of materials A and B assuming no beginning or ending material inventory required for July production is

Accepted Answer

A)  $1,080,000 for A; $648,000 for B
B)  $1,080,000 for A; $1,296,000 for B
C)  $1,170,000 for A; $702,000 for B
D)  $1,125,000 for A; $675,000 for BE) A) and B)
F) A) and C)

Question 5

Miller and Sons' static budget for 10,000 units of production includes $50,000 for direct materials, $44,000 for direct labor, variable utilities of $5,000, and supervisor salaries of $24,000.A flexible budget for 12,000 units of production would show

Accepted Answer

A)  the same cost structure in total
B)  direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $29,000
C)  total variable costs of $148,000
D)  direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $24,000E) A) and D)
F) A) and C)

Question 6

Supervisor salaries, maintenance, and indirect factory wages would normally appear in the operating expenses budget.

Accepted Answer

A) True 
 B)False

Question 7

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?

Accepted Answer

The answer of Osprey Cycles, Inc.projected sales of 75,000 bicycles...

Question 8

The cash payments expected for Finch Company in the month of May are

Accepted Answer

A)  $185,600
B)  $149,900
C)  $187,600
D)  $189,100E) A) and B)
F) All of the above

Question 9

The primary difference between a static budget and a flexible budget is that a static budget

Accepted Answer

A)  is suitable in volatile demand situation while flexible budget is suitable in a stable demand situation
B)  is concerned only with future acquisitions of fixed assets, whereas a flexible budget is concerned with expenses that vary with sales
C)  includes only fixed costs, whereas a flexible budget includes only variable costs
D)  is a plan for a single level of production, whereas a flexible budget can be converted to any level of productionE) A) and B)
F) A) and C)

Question 10

The number of pounds of materials A and B required for July production is

Accepted Answer

A)  216,000 lbs.of A; 36,000 lbs.of B
B)  216,000 lbs.of A; 72,000 lbs.of B
C)  234,000 lbs.of A; 39,000 lbs.of B
D)  225,000 lbs.of A; 37,500 lbs.of BE) None of the above
F) C) and D)

Question 11

Prepare a monthly flexible selling expense budget for Cottonwood Company for sales volumes of $300,000,
$350,000, and $400,000, based on the following data

Accepted Answer

Fixed expense:

ACCREDITING ...

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Budgeted sales for the month are

Accepted Answer

A)  $3,180,000
B)  $5,820,000
C)  $1,800,000
D)  $8,500,000E) All of the above
F) A) and B)

Question 14

Detailed supplemental schedules based on department responsibility are often prepared for major items in the operating expenses budget.

Accepted Answer

A) True 
 B)False

Question 15

The dollar amount of Material C used in production during the year is

Accepted Answer

A)  $746,400
B)  $724,800
C)  $824,400
D)  $758,160E) None of the above
F) B) and C)

Question 16

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

Accepted Answer

A)  flexible budgeting
B)  continuous budgeting
C)  zero-based budgeting
D)  master budgetingE) A) and C)
F) B) and D)

Question 17

The number of pounds of Materials A and B required for August production is

Accepted Answer

A)  216,000 lbs.of A; 72,000 lbs.of B
B)  216,000 lbs.of A; 36,000 lbs.of B
C)  225,000 lbs.of A; 37,500 lbs.of B
D)  234,000 lbs.of A; 39,000 lbs.of BE) A) and B)
F) A) and D)

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

What is the amount of cash excess or deficiency after considering the minimum cash balance required for March?

Accepted Answer

A)  excess of $214,200
B)  excess of $15,800
C)  deficiency of $60,000
D)  excess of $25,300E) A) and D)
F) B) and C)

Question 20

What is the amount of the deficiency or excess cash after considering the minimum cash balance required for January?

Accepted Answer

A)  excess of $26,700
B)  deficiency of $136,700
C)  excess of $356,700
D)  excess of $60,000E) C) and D)
F) B) and D)

Exam 6: Budgeting

What is the amount of the deficiency or excess cash after considering the minimum cash balance required for January?

Correct AnswerverifiedShow Answer

Prepare a monthly flexible selling expense budget for Cottonwood Company for sales volumes of $300,000, $350,000, and $400,000, based on the following data

Correct Answerverified Fixed expense: ACCREDITING ...View AnswerShow Answer

Budgeted sales for the month are

Correct AnswerverifiedShow Answer

If the expected sales volume for the current period is 9,000 units, the desired ending inventory is 200 units, and the beginning inventory is 300 units, the number of units set forth in the production budget, representing total production for the current period, is

Correct AnswerverifiedShow Answer

Miller and Sons' static budget for 10,000 units of production includes $50,000 for direct materials, $44,000 for direct labor, variable utilities of $5,000, and supervisor salaries of $24,000.A flexible budget for 12,000 units of production would show

Correct AnswerverifiedShow Answer

Detailed supplemental schedules based on department responsibility are often prepared for major items in the operating expenses budget.

Correct AnswerverifiedShow Answer

The number of pounds of Materials A and B required for August production is

Correct AnswerverifiedShow Answer

The primary difference between a static budget and a flexible budget is that a static budget

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The total direct materials purchases of materials A and B assuming no beginning or ending material inventory required for July production is

Correct AnswerverifiedShow Answer

The dollar amount of Material C used in production during the year is

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

The cash payments expected for Finch Company in the month of May are

Correct AnswerverifiedShow Answer

Supervisor salaries, maintenance, and indirect factory wages would normally appear in the operating expenses budget.

Correct AnswerverifiedShow Answer

What is the amount of cash excess or deficiency after considering the minimum cash balance required for March?

Correct AnswerverifiedShow Answer

The number of pounds of materials A and B required for July production is

Correct AnswerverifiedShow Answer

Match each phrase that follows with the term a-e it describes. -begins by estimating the quantity of sales

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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Fixed expense:
ACCREDITING ...
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