FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 21: Budgeting

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

A sporting goods store purchased $7,000 of ski boots in October. The store had $3,000 of ski boots in inventory at the beginning of October, and expects to have $2,000 of ski boots in inventory at the end of October to cover part of anticipated November sales. What is the budgeted cost of goods sold for October?

A) $10,000
B) $5,700
C) $8,000
D) $9,500

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

Correct Answer

verified

Show Answer

Question 32

Essay

Review LaterAdd Note

Review Later

Warmfeet manufactures comforters. Assume the estimated inventories on January 1, 2012, for finished goods, work in process, and materials were $51,000, $28,000 and $33,000 respectively. Also assume the desired inventories on December 31, 2012, for finished goods, work in process, and materials were $48,000, $35,000 and $29,000 respectively. Direct material purchases were $555,000. Direct labor was $252,000 for the year. Factory overhead was $176,000. Prepare a cost of goods sold budget for Warmfeet, Inc.

Correct Answer

verified

Show Answer

Question 33

True/False

Review LaterAdd Note

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

Production and sales estimates for April are as follows: The budgeted total sales for April is:

In preparing flexible budgets, the first step is to identify the fixed and variable components of the various costs and expenses being budgeted.

The budget procedures used by a large manufacturer of automobiles would probably not differ from those used by a small manufacturer of paper products.

As of January 1 of the current year, the Grackle Company had accounts receivables of $50,000. The sales for January, February, and March were as follows: $120,000, $140,000 and $150,000. 20% of each month's sales are for cash. Of the remaining 80% (the credit sales) , 60% are collected in the month of sale, with 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 March?

Supervisor salaries and indirect factory wages would normally appear in the direct labor cost budget.

The flexible budget is, in effect, a series of static budgets for different levels of activity.

Big Wheel, Inc. collects 25% of its sales on account in the month of the sale and 75% in the month following the sale. If sales on account are budgeted to be $225,000 for March and $250,000 for April, what are the budgeted cash receipts from sales on account for April?

Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $260,000, $375,000, and $400,000, respectively, for September, October, and November. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale. The cash collections in October from accounts receivable are:

Fashion Jeans, Inc. sells two lines of jeans; Simple Life and Fancy Life. Simple Life sells for $85.00 a pair and Fancy Life sells for $100.00 a pair. The company sells all of its jeans on credit and estimates that 60% is collected in the month of the sale, 35% is collected in the following month, and the rest is considered to be uncollectible. The estimated sales for Simple are as follows: January 20,000 jeans, February 27,500 jeans, and March 25,000 jeans. The estimated sales for Fancy are as follows: January 18,000 jeans, February 19,000, and March 20,500 jeans. What are the expected cash receipts for the month of March?

Door & Window Co. was organized on August 1 of the current year. Projected sales for the next three months are as follows: The company expects to sell 40% of its merchandise for cash. Of the sales on account, 25% are expected to be collected in the month of the sale and the remainder in the following month. Prepare a schedule indicating total cash collections for August, September, and October.

The budgeted direct materials purchases is normally computed as the sum of (1) the materials for production and (2) the desired ending inventory.

The task of preparing a budget should be the sole task of the most important department in an organization.

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

Estimated cash payments are planned reductions in cash from all of the following except:

The first budget to be prepared is usually the cash budget.

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

Which of the following would not be used in preparing a cash budget for October?