Ray Company's projected sales budget for the next four months is as follows:
January 70,000
February 90,000
March 55,000
April 65,000
Beginning inventory for the year is 27,000 units. Ending inventory for each month should be 30% of the next month'ss sale
70,000
Ray Company's projected sales budget for the next four months is as follows:
January 70,000
February 90,000
March 55,000
April 65,000
Beginning inventory for the year is 27,000 units. Ending inventory for each month should be 30% of the next month'ss sale
106,500
Conner Company is a medium-sized toy distributor. Experience has shown that 30% of sales are collected within the months of sale, 60% is collected the month after the sale, and 10% is collected two months after the sale. Inventory on hand at the end of a
$22,000
Conner Company is a medium-sized toy distributor. Experience has shown that 30% of sales are collected within the months of sale, 60% is collected the month after the sale, and 10% is collected two months after the sale. Inventory on hand at the end of a
$15,000
Conner Company is a medium-sized toy distributor. Experience has shown that 30% of sales are collected within the months of sale, 60% is collected the month after the sale, and 10% is collected two months after the sale. Inventory on hand at the end of a
$22,000
Conner Company is a medium-sized toy distributor. Experience has shown that 30% of sales are collected within the months of sale, 60% is collected the month after the sale, and 10% is collected two months after the sale. Inventory on hand at the end of a
$24,000
Horton Company produces and sells two products: round and square tables. In August 20x0, the budget projected the following for 20x1:
Total budgeted production of tables in 20x1 is
12,000 units
Horton Company produces and sells two products: round and square tables. In August 20x0, the budget projected the following for 20x1:
The cost of purchases for direct material P for 20x1 is
$2,635,000
Horton Company produces and sells two products: round and square tables. In August 20x0, the budget projected the following for 20x1:
Direct labor costs for 20x1 are
$444,000
Horton Company produces and sells two products: round and square tables. In August 20x0, the budget projected the following for 20x1:
The cost of ending finished goods inventory of round tables for 20x1 is
$662,500
Matz Company expects to sell 24,000 units of finished goods over the next 6-month period. The company has 10,000 units on hand and its managers want to have 14,000 units on hand at the end of the period. To produce one unit of finished product, two units
28,000
Matz Company expects to sell 24,000 units of finished goods over the next 6-month period. The company has 10,000 units on hand and its managers want to have 14,000 units on hand at the end of the period. To produce one unit of finished product, two units
66,000
Taft Corporation collects cash from customers as follows: 60% in the month of sale, 20% in the month after sale, 19% in the second month after sale, and 1% is never collected. Bad debts are written off annually in December. Budgeted sales are all on credi
$554,000
Taft Corporation collects cash from customers as follows: 60% in the month of sale, 20% in the month after sale, 19% in the second month after sale, and 1% is never collected. Bad debts are written off annually in December. Budgeted sales are all on credi
$353,000
Planning Systems, Inc. has forecast the following unit sales and production for the next year, by quarter:
.....
A finished unit requires on unit of material A and two units of material B. There should be enough material on hand at the end of each quarter
100
Planning Systems, Inc. has forecast the following unit sales and production for the next year, by quarter:
.....
A finished unit requires on unit of material A and two units of material B. There should be enough material on hand at the end of each quarter
28
Planning Systems, Inc. has forecast the following unit sales and production for the next year, by quarter:
.....
A finished unit requires on unit of material A and two units of material B. There should be enough material on hand at the end of each quarter
156
Planning Systems, Inc. has forecast the following unit sales and production for the next year, by quarter:
.....
A finished unit requires on unit of material A and two units of material B. There should be enough material on hand at the end of each quarter
64
Planning Systems, Inc. has forecast the following unit sales and production for the next year, by quarter:
.....
A finished unit requires on unit of material A and two units of material B. There should be enough material on hand at the end of each quarter
264
Sales of $250,000 are forecast for the third quarter. Gross profit is 60% of sales, and beginning inventory is $165,000. If ending inventory is budgeted as $183,000, what are the budgeted purchases?
$118,000
Allen, Inc. has the following disbursements: What is the amount of cash disbursements for February?
$13,300
A firm expects credit sales for the week to amount to $3,000, accounts receivable to increase by $200, and accounts payable to decrease by $500. Given this information, what will be the effect on cash?
$2,300 increase
A firm that manufactures vases has budgeted production for the next four months as follows:
Budgeted purchases of silica in grams for November would be:
1,350,000
Kelita, Inc. projects sales for its first three months of operation as follows?
....
Inventory on October 1 is $40,000. Subsequent beginning inventories should be 40% of that month's cost of goods sold. Goods are priced at 140% of their cost. 50% of purch
$100,000
Kelita, Inc. projects sales for its first three months of operation as follows?
....
Inventory on October 1 is $40,000. Subsequent beginning inventories should be 40% of that month's cost of goods sold. Goods are priced at 140% of their cost. 50% of purch
$120,000
Kelita, Inc. projects sales for its first three months of operation as follows?
....
Inventory on October 1 is $40,000. Subsequent beginning inventories should be 40% of that month's cost of goods sold. Goods are priced at 140% of their cost. 50% of purch
$40,000
Kelita, Inc. projects sales for its first three months of operation as follows?
....
Inventory on October 1 is $40,000. Subsequent beginning inventories should be 40% of that month's cost of goods sold. Goods are priced at 140% of their cost. 50% of purch
$107,500
Kelita, Inc. projects sales for its first three months of operation as follows?
....
Inventory on October 1 is $40,000. Subsequent beginning inventories should be 40% of that month's cost of goods sold. Goods are priced at 140% of their cost. 50% of purch
WRONG $140,000
Gold Company has the following balances at Dec 31: Cash $6,000. accounts receivable $34,000 and accounts payable $20,000. Budgeted sales follow:
What is the budgeted cost of purchases for February?
$19,200
Gold Company has the following balances at Dec 31: Cash $6,000. accounts receivable $34,000 and accounts payable $20,000. Budgeted sales follow:
The cash disbursements for purchases in March are
$38,240
Gold Company has the following balances at Dec 31: Cash $6,000. accounts receivable $34,000 and accounts payable $20,000. Budgeted sales follow:
Cash receipts for April will be
$77,800
Gold Company has the following balances at Dec 31: Cash $6,000. accounts receivable $34,000 and accounts payable $20,000. Budgeted sales follow:
What will be the ending cash balance for January?
$6,000
The Phillips Company's budgeted annual indirect labor cost is: $7,200 + $0.75 per direct labor hour. Operating budgets for the current month are based on 30,000 hours of budgeted direct labor hours. Budgeted indirect labor cost is
$29,700
Steve Company uses the following flexible budget formula for monthly repair cost: total cost = $700 + $0.40 per machine hour. The annual operating budget calls for 35,000 hours of planned machine time. Budgeted repair cost is
$14,700
The actual preparation of a budget usually begins with the
Sales budget
An advantage of a flexible budget is that it
Allows comparisons of the actual costs with those that should have been incurred
To overcome possible problems with budgets that are developed only by top level managers, an alternative is to use
Participative budgets
Zero-based budgeting
Requires managers to justify all funds requested
A formalized financial plan for organizational operations in the coming year is best described as a
Budget
Budgets provide a mechanism for defining which of the following for individual managers? I. Decision rights; II. Behaviors; III. Forecasts:
I only
One objective of budgeting is motivating managers to
Use resources efficiently.
Which of the following is not required to develop a budgeted income statement?
Cash budget
Which of the following must managers develop prior to preparing a budgeted income statement?
Support department budgets
TFS Corporation, a retail company selling hotel furniture, has just completed its master budget for the next fiscal year, Ending inventory is budgeted at 20% of cost of goods available for sale. Selected data from that process appear in the table below:
T
$28,000
TFS Corporation, a retail company selling hotel furniture, has just completed its master budget for the next fiscal year, Ending inventory is budgeted at 20% of cost of goods available for sale. Selected data from that process appear in the table below:
T
$122,000
TFS Corporation, a retail company selling hotel furniture, has just completed its master budget for the next fiscal year, Ending inventory is budgeted at 20% of cost of goods available for sale. Selected data from that process appear in the table below:
W
Expected inflows of cash of $120,000
TFS Corporation, a retail company selling hotel furniture, has just completed its master budget for the next fiscal year, Ending inventory is budgeted at 20% of cost of goods available for sale. Selected data from that process appear in the table below:
W
$30,000
TFS Corporation, a retail company selling hotel furniture, has just completed its master budget for the next fiscal year, Ending inventory is budgeted at 20% of cost of goods available for sale. Selected data from that process appear in the table below:
T
$35,000
TFS Corporation, a retail company selling hotel furniture, has just completed its master budget for the next fiscal year, Ending inventory is budgeted at 20% of cost of goods available for sale. Selected data from that process appear in the table below:
T
$92,000
TFS Corporation, a retail company selling hotel furniture, has just completed its master budget for the next fiscal year, Ending inventory is budgeted at 20% of cost of goods available for sale. Selected data from that process appear in the table below:
T
Undeterminable from the information given
On a budgeted income statement, the gross margin is determined by
Revenue - cost of goods sold
BNN Corporation expects to operate at a profit in its next fiscal year. Which of the following statements about its budgeted income statement is true?
Operating income is expected to be greater than net income
At the end of 20x1, SWP Corporation prepared its master budget for 20x2. Selected amounts from the budget, along with actual results for 20x2, are presented below:
...
SWP's total budget variance for the data provided is
$29,400 favorable
At the end of 20x1, SWP Corporation prepared its master budget for 20x2. Selected amounts from the budget, along with actual results for 20x2, are presented below:
Which item in the table have favorable variances?
Sales and research and development expense
At the end of 20x1, SWP Corporation prepared its master budget for 20x2. Selected amounts from the budget, along with actual results for 20x2, are presented below:
Which items in the table have unfavorable variances?
Interest revenue and cost of goods sold
At the end of 20x1, SWP Corporation prepared its master budget for 20x2. Selected amounts from the budget, along with actual results for 20x2, are presented below:
The research and development cost variance could be explained by
Efficient cost management
At the end of 20x1, SWP Corporation prepared its master budget for 20x2. Selected amounts from the budget, along with actual results for 20x2, are presented below:
The variance for cost of goods sold could be explained by
Actual sales being greater than the budget
Which of the following is based on forecasts of specific volumes of products or services?
Static budgets
In 20x2, OSW Corporation budgeted its sales volume at 10,000 units. Actual volume was 9,800 units. If OSW uses the static budget to calculate variances and assuming that inventory levels are insignificant, which of the following statements is true?
Budgeted variable costs will be overstated compared to actual variable costs
Static budgets:I. Are based on specific volumes of products;II. May hide variances caused by operational inefficiencies;III. Do not include fixed costs;
I and II only
A budget that reflects a range of operations is called a
Flexible budget
Which of the following is a simple version of a flexible budget?
A cost-volume-profit analysis
ATR Corporation's budgeted product costs for the third quarter of 20x2 were based on an expected volume of 1,500 units. The budgeted unit costs appear below:
ATR's total budgeted product cost for the third quarter of 20x2 was
$16,500
ATR Corporation's budgeted product costs for the third quarter of 20x2 were based on an expected volume of 1,500 units. The budgeted unit costs appear below:
ATR Corporation's budgeted product costs for the third quarter of 20x2 were based on an expected
$20,500
ATR Corporation's budgeted product costs for the third quarter of 20x2 were based on an expected volume of 1,500 units. The budgeted unit costs appear below:
If ATR's actual volume for the third quarter of 20x2 was 15% above its expected volume: I. Actual
None of the above (neither I nor II)
Uncontrollable external factors can create challenges in measuring the results for which managers should be held responsible. Which of the following is the best example of an uncontrollable external factor for a manager who oversees all of the operations
Raw materials prices changed because of a change in environmental laws.
Intentionally understating revenues and (or) overstating costs during a budgeting process is called
Budgetary slack
Under which of the following types of budgeting must managers justify their budget requests each year as if prior information did not exist?
Zero-based
The primary disadvantage of zero-based budgeting is
The time it takes to develop a zero-based budget
Which of the following is prepared periodically, reflecting planning changes for a specific future time frame?
Rolling budget
Which of the following budgeting systems relies on cost pools and cost drivers?
Activity-based budgeting
When an organization implements activity-based budgeting, managers must identify activities for
Both production and suppor
What feature differentiates Kaizen budgeting from other forms of budgeting?
It is used for products with decreasing prices over time
Which of the following is a new type of information technology project management that emphasizes communication between customers and information technology personnel?
Extreme programming
In an activity-based budgeting system, managers develop budgets for each
Activity
The main advantage of using a rolling budget is
Its incorporation of more current information than static or flexible budgets
Kaizen budgeting
Sets targeted cost reductions over time
Which of the following is a type of budgeting that is used to develop cost and time budgets for information technology projects?
Extreme programming
When managers use Kaizen budgeting, which of the following is (are) explicitly embedded in the budget? I. Cost reduction goals;II. Quality improvement goals;III. Changes in activity cost drivers:
I and II only
To prepare a cash budget, managers plan: I. Cash receipts;II. Cash disbursements;III. Short-term borrowing or investments:
I, II, and III
To address the difference between budgeted cash receipts and budgeted cash disbursements, managers also budget which of the following?
Short-term borrowing or investments
In a cash budget, operating cash receipts include
Cash receipts from accounts receivable collections
Which of the following items is least likely to be included in a cash budget?
Cash paid for depreciation
TNR Corporation is preparing its budgeted income statement for the month of August. Budgeted sales are $18,000. Cost of goods sold is twice the amount of operating costs, and operation costs plus cost of goods sold equals 40% of net income. Return on sale
$15,600
TNR Corporation is preparing its budgeted income statement for the month of August. Budgeted sales are $18,000. Cost of goods sold is twice the amount of operating costs, and operation costs plus cost of goods sold equals 40% of net income. Return on sale
$1,200
TNR Corporation is preparing its budgeted income statement for the month of August. Budgeted sales are $18,000. Cost of goods sold is twice the amount of operating costs, and operation costs plus cost of goods sold equals 40% of net income. Return on sale
$9,000
TNR Corporation is preparing its budgeted income statement for the month of August. Budgeted sales are $18,000. Cost of goods sold is twice the amount of operating costs, and operation costs plus cost of goods sold equals 40% of net income. Return on sale
37.5%
Sales are 30% cash and 70% on account, and 60% of credit sales are collected in the month of the sale. In the month after the sale, 30% or credit sales are collected. The remainder is collected two months after the sale. It takes 4 pounds of direct materi
$24,750
Sales are 30% cash and 70% on account, and 60% of credit sales are collected in the month of the sale. In the month after the sale, 30% or credit sales are collected. The remainder is collected two months after the sale. It takes 4 pounds of direct materi
$10,857
Sales are 30% cash and 70% on account, and 60% of credit sales are collected in the month of the sale. In the month after the sale, 30% or credit sales are collected. The remainder is collected two months after the sale. It takes 4 pounds of direct materi
1,920 pounds
Sales are 30% cash and 70% on account, and 60% of credit sales are collected in the month of the sale. In the month after the sale, 30% or credit sales are collected. The remainder is collected two months after the sale. It takes 4 pounds of direct materi
1,920 pounds
Sales are 30% cash and 70% on account, and 60% of credit sales are collected in the month of the sale. In the month after the sale, 30% or credit sales are collected. The remainder is collected two months after the sale. It takes 4 pounds of direct materi
$25,344
Sales are 30% cash and 70% on account, and 60% of credit sales are collected in the month of the sale. In the month after the sale, 30% or credit sales are collected. The remainder is collected two months after the sale. It takes 4 pounds of direct materi
$21,168
Sales are 30% cash and 70% on account, and 60% of credit sales are collected in the month of the sale. In the month after the sale, 30% or credit sales are collected. The remainder is collected two months after the sale. It takes 4 pounds of direct materi
$5,811 increase
Which of the following partial budget sequences is correct?
Cost of goods sold, income statement, cash
Which of the following correctly describes budgeted direct materials purchases?
Production needs + desired ending inventory - beginning inventory
The difference between a static budget and a flexible budget is that (Static budget is for;Flexible budget is for):
Single volume level;Several different volume levels
When upper-level management prepares a budget with consultations from managers and employees, the firm has a
Participative budget
Bynsel, Inc., a retailer, projects the following purchases and sales of its product for the next 4 months:
Each unit cost %100, and all purchases are on account. Two-thirds of purchases are paid in the month of the purchase are one-third are paid in the m
$78,400
Bynsel, Inc., a retailer, projects the following purchases and sales of its product for the next 4 months:
Each unit cost %100, and all purchases are on account. Two-thirds of purchases are paid in the month of the purchase are one-third are paid in the m
$32,733
Which of the following phrases should not be associated with kaizen budgeting?
Budgetary slack
Which of the following phrases should not be associated with participative budgeting?
Top-down
Budgets are used to: I. Forecast future performance; II. Compare to actual operations; III. Communicate an organization's strategy and targets:
I, II, and III
Rolling budgets: I. Are often prepared monthly or quarterly; II. Reflect any changes going forward through a specified future period (usually annually or longer); III. Provide managers with more current budget targets than traditional budgets:
I, II, and III
The revenues budget
Provides estimated selling prices, volumes, and total revenues
Kaizen budgets
Include cost reduction and quality improvements in the budgeting process
The manufacturing overhead budget: I. Compares revenue to overhead; II. Forecasts overhead costs per unit for cost of goods sold calculations; III. Forecasts total overhead costs:
II and III only
Budget assumptions are gathered from: I. Last year's budgets; II. Department heads with information about next year's plans; III. Future expectations:
I, II, and III
The direct manufacturing labor budget: I. Is stated in direct labor hours and cost; II. Is only stated in direct labor cost; III. Includes hours and costs of supervisors:
I only
The cost of goods sold budget
Includes beginning inventories
The budgeted income statement: I. Accumulates information from the supporting budgets; II. Is based only on last year's income statement; III. Is prepared a few weeks before the actual income statement is prepared for the period:
I only
Flexible budgets reflect: I. Operations for actual costs and revenues; II. Operations for costs and revenues for the volume of sales from the master budget; III. Operations for actual volume of sales with budgeted variable costs per unit and budgeted tota
III only
Business strategy is incorporated in budgets through: I. Proposed changes in product emphasis; II. Revenue forecasts for new products; III. Proposed changes in discretionary expenses such as research and development:
I, II, and III
Participative budgeting: I. Occurs from the bottom up; II. Motivates employees to buy into the budgeting process; III. Provides managers with incentives to build in budgetary slack:
I, II, and III
Activity based budgeting
Uses more cost pools and cost drivers to determine forecasted costs
Expected ending inventory volumes and costs need to be calculated to forecast
Cost of goods sold
All of the following are potential adjustments to flexible budgets except
Fixed costs are adjusted for the effects of actual volumes
The Dilly Company....
Assuming that all of the beginning inventory for December is sold, forecasted gross purchases for January are
$1,472,000
The Dilly Company....
Forecasted ending inventory for the month of December is
$420,000
The Dilly Company...
Forecasted sales discounts to be taken by customers making remittances during February are
None of the above
The Dilly Company...
Forecasted total collections from customers during February are
$1,861,750
Table Top...
The number of tables to be produced during August, 20x5 is
2,340 tables
Table Top...
Assume the required production for August and September is 1,600 and 1,800 units, respectively, and the July 31, 20x5 raw materials inventory is 4,200 units. The number of table legs to be purchased in August is
6,520 legs
Table Top...
Assume that Table Top will produce 1,800 units in the month of September 20x5. How many employees will be required for the assembly department? (Fractional employees are acceptable since employees can be hired on a part-time basis. Assume a 4
3.75 employees