FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 6: Budgeting

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

Essay

Review LaterAdd Note

Review Later

Door & Window Co. was organized on August 1 of the current year. Projected sales for the next three months are as follows:

Correct Answer

verified

The company expects to sell 40% of its m...

View Answer

Show Answer

Question 22

True/False

Review LaterAdd Note

Review Later

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

A) True
B) False

Correct Answer

verified

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

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

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

Sweet Dreams, Inc. manufactures bedding sets. The budgeted production is for 52,000 comforters in 2012. Each comforter requires 1.5 hours to cut and sew the material. If cutting and sewing labor costs $11.00 per hour, determine the direct labor budget for 2012.

The process of developing budget estimates by requiring all levels of management to estimate sales, production, and other operating data as though operations were being initiated for the first time is referred to as:

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:

Callon Industries has projected sales of 67,000 machines for 2012. The estimated January 1, 2012, inventory is 6,000 units, and the desired December 31, 2012, inventory is 15,000 units. What is the budgeted production (in units) for 2012?

For February, sales revenue is $700,000; sales commissions are 5% of sales; the sales manager's salary is $96,000; advertising expenses are $80,000; shipping expenses total 2% of sales; and miscellaneous selling expenses are $2,500 plus 1/2 of 1% of sales. Total selling expenses for the month of February are:

Goal conflict can be avoided if budget goals are carefully designed for consistency across all areas of the organization.

Prepare a monthly flexible selling expense budget for PineTree Company for sales volumes of $300,000, $350,000, and $400,000, based on the following data:

A budget procedure that provides for the maintenance at all times of a twelve-month projection into the future is called master budgeting.

Mandy Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 98,000 units, and desired ending inventory is 80,000 units. The quantities of direct materials expected to be used for each unit of finished product are given below. Material A .50 lb. per unit @ $ .60 per pound Material B 1.00 lb. per unit @ $1.70 per pound Material C 1.20 lb. per unit @ $1.00 per pound The dollar amount of direct material C used in production during the year is:

Tanya Inc.'s static budget for 10,000 units of production includes $60,000 for direct materials, $44,000 for direct labor, fixed utilities costs of $5,000, and supervisor salaries of $20,000. A flexible budget for 12,000 units of production would show:

Crystal Company manufactures two models of microcassette recorders, VCH and MTV. Based on the following production data for April of the current year, prepare a production budget for April.

The Cardinal Company had a finished goods inventory of 55,000 units on January 1. Its projected sales for the next four months were: January - 200,000 units; February - 180,000 units; March - 210,000 units; and April - 230,000 units. The Cardinal Company wishes to maintain a desired ending finished goods inventory of 20% of the following months sales. What should the budgeted production be for January?

Once a static budget has been determined, it is changed regularly as the underlying activity changes.

The capital expenditures budget summarizes future plans for acquisition of fixed assets.

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

Budgeting supports the planning process by encouraging all of the following activities except: