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Exam 8: Master Budgeting

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Question 91

True/False

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The selling and administrative budget is typically prepared before the cash budget.

A) True
B) False

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Question 92

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Acti Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year: At Acti, 40% of raw materials purchases are normally paid for in the month of purchase. The remaining 60% is paid for in the month following the purchase. -The budgeted direct labor cost per Pod is closest to:

A) $13.44
B) $9.60
C) $7.38
D) $11.00

E) B) and D)
F) B) and C)

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Question 93

Multiple Choice

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Which of the following statements is NOT correct concerning the Cash Budget?

Acti Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year: At Acti, 40% of raw materials purchases are normally paid for in the month of purchase. The remaining 60% is paid for in the month following the purchase. -How much cash should Acti expect to pay out for raw material purchases during November?

BW Department Store expects to generate the following sales for the next three months: BW's cost of goods sold is 60% of sales dollars.At the end of each month,BW wants a merchandise inventory balance equal to 25% of the following month's expected cost of goods sold.What dollar amount of merchandise inventory should BW plan to purchase in August?

Bustillo Inc.is working on its cash budget for March.The budgeted beginning cash balance is $35,000.Budgeted cash receipts total $142,000 and budgeted cash disbursements total $151,000.The desired ending cash balance is $30,000.To attain its desired ending cash balance for March,the company needs to borrow:

Marst Corporation's budgeted production in units and budgeted raw materials purchases over the next three months are given below: Two pounds of raw materials are required to produce one unit of product.The company wants raw materials on hand at the end of each month equal to 30% of the following month's production needs.The company is expected to have 42,000 pounds of raw materials on hand on January 1.Budgeted production for February should be:

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: o Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January. o Collections are expected to be 65% in the month of sale and 35% in the month following the sale. o The cost of goods sold is 80% of sales. o The company desires to have an ending merchandise inventory at the end of each month equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. o Other monthly expenses to be paid in cash are $21,100. o Monthly depreciation is $21,000. o Ignore taxes. -The net income for December would be:

There are various budgets within the master budget.One of these budgets is the production budget.Which of the following BEST describes the production budget?

Budgeted sales in Acer Corporation over the next four months are given below: Thirty percent of the company's sales are for cash and 70% are on account.Collections for sales on account follow a stable pattern as follows: 50% of a month's credit sales are collected in the month of sale,30% are collected in the month following sale,and 20% are collected in the second month following sale.Given these data,cash collections for December should be:

The direct labor budget begins with the required production in units from the production budget.

-The production department of Tarre Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year. Each unit requires 0.30 direct labor-hours at $16.00 per hour. Required Prepare a direct labor budget for the upcoming fiscal year,assuming that the direct labor work force is adjusted each quarter to match the number of hours required to produce the budgeted production.

Hesterman Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Credit sales are collected: 40% in the month of the sale 60% in the following month The ending finished goods inventory should equal 40% of the following month's sales. The ending raw materials inventory should equal 20% of the following month's raw materials production needs. -The budgeted required production for May is closest to:

Cash collections in a schedule of cash collections typically consist of collections on sales made to customers in prior periods plus collections on sales made in the current budget period.

The direct labor budget shows the direct labor-hours required to satisfy the production budget.

Acti Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year: At Acti, 40% of raw materials purchases are normally paid for in the month of purchase. The remaining 60% is paid for in the month following the purchase. -The company recomputes its predetermined overhead rate every month.The predetermined overhead rate for October should be:

Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 30% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs. -If the budgeted cost of raw materials purchases in February is $50,152,then the budgeted accounts payable balance at the end of February is closest to:

Hesterman Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Credit sales are collected: 40% in the month of the sale 60% in the following month The ending finished goods inventory should equal 40% of the following month's sales. The ending raw materials inventory should equal 20% of the following month's raw materials production needs. -The expected cash collections for May is closest to:

Harrti Corporation has budgeted for the following sales: Sales are collected as follows: 10% in the month of sale; 60% in the month following the sale; and the remaining 30% in the second month following the sale.In Razz's budgeted balance sheet at December 31,at what amount will accounts receivable be shown?

The following information was taken from the production budget of Piwte Corporation for next quarter: How many units is the company expecting to sell in the month of February?