Exam 7: Introduction to Budgets and Preparing the Master Budget

Preparing a master budget using a spreadsheet is a quick and easy task.

Duke Company has the following information: Month Budgeted Purchases January \ 26,800 February 29,000 March 30,520 April 29,480 May 27,680 Purchases are paid for in the following manner: 10% in the month of purchase 50% in the month after purchase 40% two months after purchase _____ is the total estimated cash disbursement in May from the purchase of merchandise.

A prediction of sales under a given set of conditions

Jacksonville Manufacturing Company has the following information: Month Budgeted Sales January \ 76,000 February 85,000 March 92,000 April 79,000 Budgeted Expenses per Month Wages \ 15,000 Advertising 12,000 Depreciation 3,000 Other 4\% of sales All cash expenses are paid as incurred._____ is the expected total cash disbursements for expenses in March.

Homer Company has a production schedule of 11,000 units and a budgeted sales volume of 10,000 units for the current year.In addition, 2,000 units are in beginning finished goods inventory._____ units are expected to be in ending finished goods inventory.

The master budget quantifies targets for all of the following except _____.

Important factors considered by sales forecasters include all of the following except _____.

Collections of cash from customers would appear on the _____.

Budgets generate negative feelings if they are _____.

A capital budget is a periodic business plan that includes a coordinated set of detailed operating schedules and financial statements.

Participative budgeting is the active participation of all affected employees in the formulation of the budgets.

The master budgeting process summarizes the key decisions regarding all aspects of the company's value chain.

Budgeted purchases = beginning inventory + cost of goods sold - desired ending inventory.

_____ is considered a long-range planning decision.

Fort Dodge Corporation has the following information: Month Budgeted Purchases August \ 35,000 September 38,000 October 47,000 November 36,500 December 46,000 Purchases are paid for in the following manner: 40% in the month of purchase 50% in the month after purchase 10% two months after purchase _____ is the estimated cash disbursement in December from October purchases.

Broncos Manufacturing Company has the following information: Month Budgeted Sales January \ 76,000 February 85,000 March 92,000 April 79,000 Budgeted Expenses per Month Wages \ 15,000 Advertising 12,000 Depreciation 3,000 Other 4\% of sales All cash expenses are paid as incurred._____ is the expected total expenses for the month of April.

"I cannot be bothered with setting up my monthly budget on a spreadsheet.It just takes too long to be worth the effort." Comment.

Preparing the master budget begins by establishing _____.

Starts with the assumption that current activities will not automatically be continued.

Clare Corporation has the following information: Month Budgeted Purchases August \ 40,000 September 38,000 October 43,500 November 36,500 December 46,000 Purchases are paid for in the following manner: 40% in the month of purchase 50% in the month after purchase 10% two months after purchase _____ is the estimated cash disbursement in September from August purchases.