Exam 9: Reporting and Analyzing Long-Lived Assets

At January 1, 2016, Deer Corp.has beginning inventory of 2,000 surfboards.Deer estimates it will sell 10,000 units during the first quarter of 2016 with a 12% increase in sales each quarter.Deer's policy is to maintain an ending inventory equal to 25% of the next quarter's sales.Each surfboard costs $100 and is sold for $150.How much is budgeted sales revenue for the third quarter of 2016?

Doe Manufacturing plans to sell 6,000 purple lawn chairs during May, 5,700 in June, and 6,000 during July.The company keeps 15% of the next month's sales as ending inventory.How many units should Doe produce during June?

Which one of the following items would never appear on a cash budget?

If the required direct materials purchases are 24,000 pounds, the direct materials required for production is three times the direct materials purchases, and the beginning direct materials are three and a half times the direct materials purchases, what are the desired ending direct materials in pounds?

The single most important output in preparing financial budgets is the

Dolce Co.estimates its sales at 180,000 units in the first quarter and that sales will increase by 18,000 units each quarter over the year.They have, and desire, a 25% ending inventory of finished goods.Each unit sells for $25.40% of the sales are for cash.70% of the credit customers pay within the quarter.The remainder is received in the quarter following sale. Production in units for the third quarter should be budgeted at

The master budget reflects management's long-term plans encompassing five years or more.

Teller Co.is planning to sell 900 boxes of ceramic tile, with production estimated at 870 boxes during May.Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor.Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour.Manufacturing overhead is applied at a rate of 110% of direct labor costs.Teller has 3,900 pounds of clay mix in beginning inventory and wants to have 4,500 pounds in ending inventory. What is the total amount to be budgeted in pounds for direct materials to be purchased for the month?

Which of the following statements is incorrect?

Financial budgets must be completed before the operating budgets can be prepared.

Which one of the following is not needed in preparing a production budget?

Which is the last step in developing the master budget?

The budget is developed within the framework of a sales forecast.

Strand Company is planning to sell 400 buckets and produce 380 buckets during March.Each bucket requires 500 grams of plastic and one-half hour of direct labor.Plastic costs $10 per 500 grams and employees of the company are paid $15.00 per hour.Manufacturing overhead is applied at a rate of 110% of direct labor costs.Strand has 300 kilos of plastic in beginning inventory and wants to have 200 kilos in ending inventory.How much is the total amount of budgeted direct labor for March?

The master budget for a service enterprise

On January 1, Witt Company has a beginning cash balance of $126,000.During the year, the company expects cash disbursements of $1,020,000 and cash receipts of $870,000.If Witt requires an ending cash balance of $120,000, Witt Company must borrow

The financing section of a cash budget is needed if there is a cash deficiency or if the ending cash balance is less than

Off-Line Co.has 9,000 units in beginning finished goods.The sales budget shows expected sales to be 36,000 units.If the production budget shows that 42,000 units are required for production, what was the desired ending finished goods?

The manufacturing overhead budget shows the expected manufacturing overhead costs.

Top management notices a variation from budget and an investigation of the difference reveals that the department manager could not be expected to have controlled the variation.Which of the following statements is applicable?