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Exam 9: The Master Budget

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Question 51

Multiple Choice

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On the direct materials budget,the total quantity of direct materials needed is computed as

A) quantity needed for production + desired end inventory of DM - beginning inventory of DM.
B) units to be produced + desired end inventory of DM - beginning inventory of DM.
C) units to be produced - desired end inventory of DM + beginning inventory of DM.
D) quantity needed for production - desired end inventory of DM + beginning inventory DM.

E) All of the above
F) A) and D)

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Question 52

Multiple Choice

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In which of the following company types does a manager use an operating expenses budget?

A) Manufacturing
B) Merchandising
C) Service
D) All of the above

E) A) and D)
F) A) and C)

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Question 53

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Which of the following is a benefit to an organization that implements a budget?

SportSupplies Corporation has budgeted purchases of inventory for December of $140,000.Expected beginning inventory on December 1 and ending inventory on December 31 are $90,000 and $120,000,respectively.If cost of goods sold averages 88% of sales,what are budgeted sales for December?

At the beginning of the year,Lakeview Corporation has 660 life vests in inventory.The company wants to have 2,100 vests in inventory at the end of the year and plans to sell 6,400 life vests during the year.How many life vests must Lakeview Corporation produce during the year?

Sally's neighbor recently spent $180 on fitness clothes at the Workout Shop.The neighbor used a credit card to purchase the workout clothes and the store charged a transaction fee of $0.33 plus a fee of 1.10% of the total cost of the clothes charged on the credit cards.What is the total cost of the workout clothes that Sally's neighbor paid to purchase the workout clothes?

A budget is a quantitative expression of a plan that helps managers coordinate and implement the plan.

Sander Enterprises prepared the following sales budget: The expected gross profit rate is 40% and the inventory at the end of February was $10,000.Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold. What are the total purchases budgeted for April?

"Financial budget" is best described by which of the following?

Einstein Company is preparing its cash budget for the upcoming month.The beginning cash balance for the month is expected to be $14,000.Budgeted cash receipts are $84,000,while budgeted cash disbursements are $72,000.Einstein Company wants to have an ending cash balance of $40,000.The excess (deficiency) of cash available over disbursements for the month would be

A rolling budget is a budget that

Service companies do not prepare a cost of goods sold,inventory,and purchases budget.

Lakewood Jet Skis has budgeted sales for June and July at $420,000 and $480,000,respectively.Sales are 75% credit,of which 40% is collected in the month of the sale and 60% is collected in the following month.What is the accounts receivable balance on July 31?

Jolly Company produces hula hoops.Jolly Company has the following sales projections for the upcoming year: Jolly Company wants to have 25% of the next quarter's sales in units on hand at the end of each quarter.Inventory at the beginning of the year was 5,525 hula hoops.How many hula hoops should Jolly Company produce during the first quarter?

Dallas Corporation had beginning inventory of 19,500 units and expects sales of 85,000 units during the year.Desired ending inventory is 18,500 units.How many units should Dallas Corporation produce?

The ________ budget is the only budget stated only in units,not dollars.

The ________ budget is a component in a financial budget.

In preparing the operating budget,the first step is preparing the

The operating budgets of retailers and manufacturers are virtually identical.

Two Brothers Moving prepared the following sales budget: Credit collections are 25% in the month of sale,60% in the month following the sale,and 10% two months following the sale.The remaining 5% is expected to be uncollectible. What are the total cash collections in May at Two Brothers Moving?