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Exam 21: Budgeting

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Question 71

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If Division Inc. expects to sell 200,000 units in 2012, desires ending inventory of 24,000 units, and has 22,000 units on hand as of the beginning of the year, the budgeted volume of production for 2012 is 198,000 units.

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Question 72

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Why is the sales budget usually prepared first?

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The sales budget is normally prepared fi...

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Question 73

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Principal components of a master budget include which of the following?

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

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 September from accounts receivable are:

The production budgets are used to prepare which of the following budgets.

If budgeted beginning inventory is $8,300, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted purchases should be:

The cash budget presents the expected inflow and outflow of cash for a specified period of time.

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?

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. Budgeted production for product ZZZ during the month is:

Supervisor salaries, maintenance, and indirect factory wages would normally appear in the factory overhead cost budget.

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. Budgeted production for product ZZZ during the month is:

Past performance is the best overall basis for evaluating current performance and assessing the need for corrective action.

When budget goals are set too tight, the budget becomes less effective as a tool for planning and controlling operations.

An August sales forecast projects 6,000 units are going to be sold at a price of $11.50 per unit. The desired ending iventory in units is 15% higher than the beginning inventory of 1,000 units. Total August 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. Budgeted sales for the month are:

A department store has budgeted sales of 12,000 men's suits in September. Management wants to have 6,000 suits in inventory at the end of the month to prepare for the winter season. Beginning inventory for September is expected to be 4,000 units. What is the dollar amount of the purchase of suits? Each suit has a cost of $75.

Budgets are prepared in the Accounting Department and monitored by various department managers.

Production and sales estimates for June are as follows: The number of units expected to be manufactured in June is:

For January, sales revenue is $700,000; sales commissions are 5% of sales; the sales manager's salary is $96,000; advertising expenses are $90,000; shipping expenses total 2% of sales; and miscellaneous selling expenses are $2,100 plus 1/2 of 1% of sales. Total selling expenses for the month of January are: