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Exam 8: Budgetary Planning

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Question 31

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The budgeted income statement is a combination of

A) All the operating budgets.
B) All the operating budgets plus the budgeted balance sheet.
C) The direct materials budget,the direct labor budget,and the manufacturing overhead budget.
D) The production budget,the cost of goods sold budget,and the selling and administrative expense budget.

E) A) and B)
F) A) and C)

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Question 32

Multiple Choice

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Which of the following budgets do not provide information needed for the budgeted balance sheet?

A) Materials purchases budget
B) Production budget
C) Selling and administrative expense budget
D) Cash budget

E) A) and B)
F) None of the above

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Question 33

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The purpose of the cash budget is to

The basic form of the cash budget is:

Meadow Company produces hand tools.A sales budget for the next four months is as follows: March 10,000 units,April 13,000,May 16,000 and June 21,000.Meadow Company's ending finished goods inventory policy is 10% of the following month's sales.March 1 inventory is projected to be 1,400 units.How many units will be produced in March?

If a company is planning to build inventory,

Lemon,Inc.has prepared the following budgets for March.In March,budgeted production is 1,000 units,budgeted sales is 1,200 units,and raw materials inventory and unit costs will stay constant.What is budgeted cost of goods sold for March?

The budget translates a company's objectives into financial terms.The budget's role in the organizing process is to translate the company's objectives into financial terms.

Arbor Co.has forecast sales to be $400,000 in May,$475,000 in June,$575,000 in July and $700,000 in August.Forty percent of sales are cash,the remainder is on credit.Credit sales are collected 60% in the month of sale,the remaining the following month.What are budgeted cash collections for July?

An advantage of budgeting is that it requires managers to evaluate why things did not progress according to the plan.This is not a requirement of budgeting,although managers can use budgets in this way.

Budgeted cash collections are based on the sales budget.Budgeted cash collections translates the sales budget into when it is collected in cash.

Which of the following is not a component of the master budget?

Top-down budgeting is when the local managers impose a budget on the top management.Top-town budgeting is when top management sets the budget and imposes it on lower levels of the organization.

Dane Inc.has forecast purchases on account to be $465,000 in March,$555,000 in April,$630,000 in May,and $735,000 in June.Seventy percent of purchases are paid for in the month of purchase,the remaining 30% are paid in the following month.What are budgeted cash payments for April?

Jackson Inc.produces leather handbags.The production budget for the next four months is: July 5,000 units,August 7,000,September 7,500,October 8,000.Each handbag requires 0.5 square meters of leather.Jackson Inc.'s leather inventory policy is 30% of next month's production needs.On July 1 leather inventory was expected to be 1,000 square meters.What will leather purchases be in August?

Ivory Inc.has forecast purchases on account to be $310,000 in March,$370,000 in April,$420,000 in May,and $490,000 in June.Seventy percent of purchases are paid for in the month of purchase,the remaining 30% are paid in the following month.What are budgeted cash payments for June?

Which of the following budgets would not exist for a merchandising firm?

Budgeted production is calculated by

The strategic plan is management's vision of what they desire the organization to achieve over the long term.This is the definition of a strategic plan.

____________ are the specific actions managers use to achieve their objectives.