Which of the following represents the normal sequence in which the indicated budgets are prepared?
A. Direct Materials, Cash, Sales
B. Production, Cash, Income Statement
C. Sales, Balance Sheet, Direct Labor
D. Production, Manufacturing Overhead, Sales
B. Production, Cash, Income Statement
Which of the following is not a benefit of budgeting?
A. It reduces the need for tracking actual cost activity.
B. It sets benchmarks for evaluation performance.
C. It uncovers potential bottlenecks.
D. It formalizes a manager's planning efforts.
A. It reduces the need for tracking actual cost activity.
Self-imposed budgets typically are:
A.
not subject to review by higher levels of management since to do so would contradict the participative
aspect of the budgeting processing.
B.
not subject to review by higher levels of management except in specific ca
C. Subject to review by higher levels of management in order to prevent the budgets from becoming too
loose.
Which of the following represents the correct order in which the indicated budget documents for a
manufacturing company would be prepared?
A. Sales budget, cash budget, direct materials budget, direct labor budget
B. Production budget, sales budget, direc
D. Selling and administrative expense budget, cash budget, budgeted income statement, budgeted balance
sheet
National Telephone company has been forced by competition to put much more emphasis on planning
and controlling its costs. Accordingly, the company's controller has suggested initiating a formal
budgeting process. Which of the following steps will NOT hel
A. Implementing the change quickly.
A continuous (or perpetual) budget:
A. is prepared for a range of activity so that the budget can be adjusted for changes in activity.
B. is a plan that is updated monthly or quarterly, dropping one period and adding another.
C. is a strategic plan that d
B. is a plan that is updated monthly or quarterly, dropping one period and adding another.
Which of the following statements is not correct?
A. The sales budget is the starting point in preparing the master budget.
B. The sales budget is constructed by multiplying the expected sales in units by the sales price.
C.
The sales budget generally is
D. The cash budget must be prepared prior to the sales budget because managers want to know the
expected cash collections on sales made to customers in prior periods before projecting sales for the
current period.
Budgeted production needs are determined by:
A.
adding budgeted sales in units to the desired ending inventory in units and deducting the beginning
inventory in units from this total.
B.
adding budgeted sales in units to the beginning inventory in units a
A. Adding budgeted sales in units to the desired ending inventory in units and deducting the beginning
inventory in units from this total
The budgeted amount of raw materials to be purchased is determined by:
A.
adding the desired ending inventory of raw materials to the raw materials needed to meet the
production schedule.
B.
subtracting the beginning inventory of raw materials from the ra
C. Adding the desired ending inventory of raw materials to the raw materials needed to meet the production
schedule and subtracting the beginning inventory of raw materials.
Which of the following is not correct regarding the manufacturing overhead budget?
A.
Total budgeted cash disbursements for manufacturing overhead is equal to the total of budgeted
variable and fixed manufacturing overhead.
B. Manufacturing overhead costs
A. Total budgeted cash disbursements for manufacturing overhead is equal to the total of budgeted
variable and fixed manufacturing overhead
Shown below is the sales forecast for Cooper Inc. for the first four months of the coming
year.
On average, 50% of credit sales are paid for in the month of the sale, 30% in the month following sale,
and the remainder are paid two months after the month o
C. $119,000
Budgeted sales in Allen Company over the next four months are given
below:
Twenty-five percent of the company's sales are for cash and 75% are on account. Collections for sales
on account follow a stable pattern as follows: 50% of a month's credit sales a
B. $133,500
The following data have been taken from the budget reports of Brandon company, a merchandising
company.
Forty percent of purchases are paid for in cash at the time of purchase, and 30% are paid for in each of
the next two months. Purchases for the previou
B. $254,000
Walsh Company expects sales of Product W to be 60,000 units in April, 75,000 units in May and 70,000
units in June. The company desires that the inventory on hand at the end of each month be equal to 40%
of the next month's expected unit sales. Due to exc
B. 65,000 units
Berol Company plans to sell 200,000 units of finished product in July and anticipates a growth rate in
sales of 5% per month. The desired monthly ending inventory in units of finished product is 80% of the
next month's estimated sales. There are 150,000 f
D. 665,720 units
The Willsey Merchandise Company has budgeted $40,000 in sales for the month of December. The
company's cost of goods sold is 30% of sales. If the company has budgeted to purchase $18,000 in
merchandise during December, then the budgeted change in inventor
A. $6,000 increase
Prestwich Company has budgeted production for next year as
follows:
Two pounds of material A are required for each unit produced. The company has a policy of maintaining
a stock of material A on hand at the end of each quarter equal to 25% of the next qua
B. 165,000 pounds
Veltri Corporation is working on its direct labor budget for the next two months. Each unit of output
requires 0.77 direct labor-hours. The direct labor rate is $11.20 per direct labor-hour. The production
budget calls for producing 7,100 units in October
A. $122,752.00
Hagos Corporation is working on its direct labor budget for the next two months. Each unit of output
requires 0.84 direct labor-hours. The direct labor rate is $9.40 per direct labor-hour. The production
budget calls for producing 2,100 units in June and
D. $31,584.00
Shuck Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor
budget indicates that 8,100 direct labor-hours will be required in May. The variable overhead rate is $1.40
per direct labor-hour. The company's budgeted f
A. $102,870
The manufacturing overhead budget at Latronica Corporation is based on budgeted direct labor-hours.
The direct labor budget indicates that 7,100 direct labor-hours will be required in August. The variable
overhead rate is $8.60 per direct labor-hour. The
B. $27.30
Avitia Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor
budget indicates that 3,700 direct labor-hours will be required in September. The variable overhead rate
is $5.70 per direct labor-hour. The company's bud
C. $18.70
The manufacturing overhead budget at Cutchin Corporation is based on budgeted direct labor-hours. The
direct labor budget indicates that 2,800 direct labor-hours will be required in September. The variable
overhead rate is $7.00 per direct labor-hour. The
A. $59,080
The selling and administrative expense budget of Breckinridge Corporation is based on budgeted unit
sales, which are 5,500 units for June. The variable selling and administrative expense is $1.00 per
unit. The budgeted fixed selling and administrative exp
A. $100,650
Lunderville Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales
budget shows 3,200 units are planned to be sold in December. The variable selling and administrative
expense is $3.10 per unit. The budgeted fixed selli
C. $64,000
The Carlquist Company makes and sells a product called Product K. Each unit of Product K sells for $24
dollars and has a unit variable cost of $18. The company has budgeted the following data for November:
� Sales of $1,152,200, all in cash.
� A cash bala
B. $21,000
Mosbey Inc. is working on its cash budget for June. The budgeted beginning cash balance is $16,000.
Budgeted cash receipts total $188,000 and budgeted cash disbursements total $187,000. The desired
ending cash balance is $40,000. The excess (deficiency) o
C. $17,000
Avril Company makes collections on sales according to the following
schedule:
The following sales are expected:
Cash collections in March should be budgeted to be:
A. $110,000
B. $110,800
C. $105,000
D. $113,000
D. $113,000
Deschambault Inc. is working on its cash budget for December. The budgeted beginning cash balance
is $14,000. Budgeted cash receipts total $127,000 and budgeted cash disbursements total $126,000. The
desired ending cash balance is $40,000. To attain its d
A. $25,000
Diltex Farm Supply is located in a small town in the rural west: Expected cash collections in December are:
A. $59,400
B. $140,000
C. $199,400
D. $200,000
C. $199,400
Diltex Farm Supply is located in a small town in the rural west: The cost of December merchandise purchases would be:
A. $133,250
B. $68,250
C. $130,000
D. $143,000
A. $133,250
Diltex Farm Supply is located in a small town in the rural west: December cash disbursements for merchandise purchases would be:
A. $136,500
B. $68,250
C. $133,250
D. $130,000
A. $136,500
Diltex Farm Supply is located in a small town in the rural west: The difference between cash receipts and cash disbursements for December would be:
A. $17,900
B. $22,500
C. $40,400
D. $62,900
C. $40,400
Diltex Farm Supply is located in a small town in the rural west:The net income for December would be:
A. $40,400
B. $22,500
C. $47,500
D. $28,500
B. $22,500
Diltex Farm Supply is located in a small town in the rural west: The cash balance at the end of December would be:
A. $116,900
B. $16,000
C. $100,900
D. $56,400
A. $116,900
Diltex Farm Supply is located in a small town in the rural west: The accounts receivable balance, net of uncollectible accounts, at the end of December would be:
A. $82,000
B. $113,400
C. $60,000
D. $54,000
D. $54,000
Diltex Farm Supply is located in a small town in the rural west: Accounts payable at the end of December would be:
A. $65,000
B. $68,250
C. $130,000
D. $133,250
D. $133,250
Diltex Farm Supply is located in a small town in the rural west: Retained earnings at the end of December would be:
A. $132,500
B. $155,000
C. $196,500
D. $183,900
D. $183,900
Brarin Corporation is a small wholesaler of gourmet food products: Expected cash collections in December are:
A. $360,000
B. $149,600
C. $198,000
D. $347,600
D. $347,600
Brarin Corporation is a small wholesaler of gourmet food products: The cost of December merchandise purchases would be:
A. $272,000
B. $288,000
C. $196,000
D. $282,400
D. $282,400
Brarin Corporation is a small wholesaler of gourmet food products: December cash disbursements for merchandise purchases would be:
A. $283,200
B. $196,000
C. $288,000
D. $282,400
A. $283,200
Brarin Corporation is a small wholesaler of gourmet food products:The difference between cash receipts and cash disbursements in December would be:
A. $17,000
B. $24,300
C. $41,300
D. $65,600
C. $41,300
The Kafusi Company has the following budgeted sales:
The regular pattern of collection of credit sales is 30% in the month of sale, 60% in the month following
the month of sale, and the remainder in the second month following the month of sale. There are
B. $430,000
The Kafusi Company has the following budgeted sales:
The regular pattern of collection of credit sales is 30% in the month of sale, 60% in the month following
the month of sale, and the remainder in the second month following the month of sale. There are
D. $242,000
Mitchell Company had the following budgeted sales for the last half of last year:Assume that the accounts receivable balance on July 1 was $75,000. Of this amount, $60,000 represented
uncollected June sales and $15,000 represented uncollected May sales. G
D. $200,000
Mitchell Company had the following budgeted sales for the last half of last year: What is the budgeted accounts receivable balance on December 1?
A. $80,000
B. $140,000
C. $94,500
D. $131,300
C. $94,500
Sartain Corporation is in the process of preparing its annual budget. The following beginning and ending: If the company plans to sell 670,000 units during the year, the number of units it would have to
manufacture during the year would be:
A. 670,000 uni
B. 720,000 units
Sartain Corporation is in the process of preparing its annual budget. The following beginning and ending: How much of the raw material should the company purchase during the year?
A. 1,430,000 grams
B. 1,450,000 grams
C. 1,480,000 grams
D. 1,440,000 grams
A. 1,430,000 grams
LHU Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.5
hours of direct labor at the rate of $15.00 per direct labor-hour. Management would like you to prepare a
Direct Labor Budget for June.The budgeted direct la
A. $37.50
LHU Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.5
hours of direct labor at the rate of $15.00 per direct labor-hour. Management would like you to prepare a
Direct Labor Budget for June.The company plans to s
C. $1,406,250
Hardy, Inc., has budgeted sales in units for the next five months as follows:The beginning inventory for September should be:
The beginning inventory for September should be:
A. 940 units
B. 720 units
C. 1,640 units
D. 520 units
B. 720 units
Hardy, Inc., has budgeted sales in units for the next five months as follows:The total number of units produced in July should be:
A. 7,240 units
B. 6,620 units
C. 6,300 units
D. 5,980 units
D. 5,980 units
Young Enterprises has budgeted sales in units for the next five months as follows:The beginning inventory in units for September should be:
A. 460 units
B. 6,800 units
C. 540 units
D. 680 units
D. 680 units
Young Enterprises has budgeted sales in units for the next five months as follows:The total number of units to be produced in July is:
A. 7,740 units
B. 7,200 units
C. 7,020 units
D. 7,280 units
C. 7,020 units
Young Enterprises has budgeted sales in units for the next five months as follows:The desired ending inventory for August is:
A. 540 units
B. 680 units
C. 720 units
D. 380 units
B. 680 units
Casper Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 3.5 kilograms
of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows:The desired ending inventory of Jurislon for the mont
B. $21,315
Casper Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 3.5 kilograms
of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows:The total cost of Jurislon to be purchased in August
D. $212,925
Balmforth Products, Inc. makes and sells a single product called a Bik. It takes three yards of
Material A to make one Bik. Budgeted production of Biks for the next five months is as follows:The total cost of Material A to be purchased in February is:
A.
C. $39,440
Balmforth Products, Inc. makes and sells a single product called a Bik. It takes three yards of
Material A to make one Bik. Budgeted production of Biks for the next five months is as follows:The desired ending inventory of Material A for the month of Marc
B. 7,140 yards
Balmforth Products, Inc. makes and sells a single product called a Bik. It takes three yards of
Material A to make one Bik. Budgeted production of Biks for the next five months is as follows:The total needs (i.e., production requirements plus desired endi
C. 46,500 yards
The Yost Company makes and sells a single product, Product A.If the budgeted direct labor cost for May is $161,280, then the budgeted production of Product A for May
is:
A. 16,000 units
B. 19,200 units
C. 23,040 units
D. 16,800 units
A. 16,000 units
The Yost Company makes and sells a single product, Product A.The budgeted direct labor cost per unit of Product A is:
A. $8.40
B. $7.00
C. $10.08
D. $9.60
C. $10.08
The Yost Company makes and sells a single product, Product A.The company has budgeted to produce 20,000 units of Product A in June. The finished goods inventories
on June 1 and June 30 were budgeted at 400 and 600 units, respectively. Budgeted direct labo
D. $201,600
Davol Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of the year.If the budgeted direct labor time for October is 5,000 hours, then the total budgeted manufacturing
overhead for October is:
A. $52,000
B. $106,000
C. $54,
B. $106,000
Davol Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of the year.If the budgeted direct labor time for November is 5,000 hours, then the total budgeted cash disbursements
for November must be:
A. $54,000
B. $52,000
C. $1
D. $86,000
Davol Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of the year.If the budgeted direct labor time for December is 4,000 hours, then the predetermined manufacturing
overhead per direct labor-hour for December would be:
A
D. $24.80
The manufacturing overhead budget at Mahapatra Corporation is based on budgeted direct labor-hoursThe company recomputes its predetermined overhead rate every month. The predetermined overhead rate
for May should be:
A. $14.30
B. $21.50
C. $9.50
D. $23.80
D. $23.80
The manufacturing overhead budget at Mahapatra Corporation is based on budgeted direct labor-hours.The May cash disbursements for manufacturing overhead on the manufacturing overhead budget should
be:
A. $75,050
B. $188,020
C. $94,800
D. $169,850
D. $169,850
Salge Inc. bases its manufacturing overhead budget on budgeted direct labor- hours.The September cash disbursements for manufacturing overhead on the manufacturing overhead budget
should be:
A. $42,930
B. $54,060
C. $96,990
D. $117,660
C. $96,990
Salge Inc. bases its manufacturing overhead budget on budgeted direct labor- hoursThe company recomputes its predetermined overhead rate every month. The predetermined overhead rate
for September should be:
A. $18.30
B. $14.10
C. $8.10
D. $22.20
D. $22.20
Porl Corporation makes and sells a single product called a YuteIf the company has budgeted to sell 22,000 Yutes in November, then the total budgeted selling and
administrative expenses for November would be:
A. $426,800
B. $231,000
C. $413,800
D. $195,800
A. $426,800
Porl Corporation makes and sells a single product called a YuteIf the company has budgeted to sell 19,000 Yutes in December, then the budgeted total cash
disbursements for selling and administrative expenses for December would be:
A. $387,100
B. $231,000
A. $387,100
Porl Corporation makes and sells a single product called a YuteIf the total budgeted selling and administrative expense for October is $409,000, then how many Yutes
does the company plan to sell in October?
A. 19,700 units
B. 20,000 units
C. 20,500 units
B. 20,000 units
The Gomez Company, a merchandising firm, has budgeted its activity for December according to the
following informationThe budgeted cash receipts for December are:
A. $125,000
B. $375,000
C. $530,000
D. $500,000
D. $500,000
The Gomez Company, a merchandising firm, has budgeted its activity for December according to the
following information. The budgeted cash disbursements for December are:
A. $435,000
B. $385,000
C. $425,000
D. $465,000
A. $435,000
The Gomez Company, a merchandising firm, has budgeted its activity for December according to theThe budgeted net income for December is:
A. $75,000
B. $45,000
C. $125,000
D. $65,000
following information
B. $45,000
Dengel Inc. is working on its cash budget for NovemberThe excess (deficiency) of cash available over disbursements for November will be:
A. $34,000
B. $201,000
C. $10,000
D. $14,000
A. $34,000
Dengel Inc. is working on its cash budget for NovemberTo attain its desired ending cash balance for November, the company needs to borrow:
A. $0
B. $16,000
C. $50,000
D. $84,000
B. $16,000
Deshaies Corporation is preparing its cash budget for NovemberThe excess (deficiency) of cash available over disbursements for November is:
A. $110,000
B. $6,000
C. ($4,000)
D. $14,000
B. $6,000
Deshaies Corporation is preparing its cash budget for November.To attain its desired ending cash balance for November, the company should borrow:
A. $36,000
B. $30,000
C. $24,000
D. $0
C. $24,000
Carpon Lumber sells lumber and general building supplies to building contractors in a medium-sized
town in Montana. Data regarding the store's operations follow:The net income for December would be:
A. $66,400
B. $43,900
C. $47,400
D. $61,500
B. $43,900
Carpon Lumber sells lumber and general building supplies to building contractors in a medium-sized
town in Montana. Data regarding the store's operations follow:The cash balance at the end of December would be:
A. $13,000
B. $52,400
C. $65,400
D. $74,500
C. $65,400
Carpon Lumber sells lumber and general building supplies to building contractors in a medium-sized
town in Montana. Data regarding the store's operations follow:The accounts receivable balance, net of uncollectible accounts, at the end of December would b
A. $154,000
Carpon Lumber sells lumber and general building supplies to building contractors in a medium-sized
town in Montana. Data regarding the store's operations follow:Accounts payable at the end of December would be:
A. $271,500
B. $105,000
C. $166,500
D. $262,
A. $271,500
Carpon Lumber sells lumber and general building supplies to building contractors in a medium-sized
town in Montana. Data regarding the store's operations follow:Retained earnings at the end of December would be:
A. $572,900
B. $614,400
C. $621,300
D. $529
B. $614,400