Exam 10: Budgetary Planning

Which one of the following would most likely cause an unrealistic budget to result?

Why are budgets useful in the planning process?

Use the following information for questions At January 1, 2016, Jake, Inc.has beginning inventory of 4,000 surfboards.Jake estimates it will sell 15,000 units during the first quarter of 2016 with a 10% increase in sales each quarter.Jake's policy is to maintain an ending inventory equal to 25% of the next quarter's sales.Each surfboard costs $200 and is sold for $250. -How much is budgeted sales revenue for the third quarter of 2016?

The manufacturing overhead budget generally has separate sections for variable and fixed costs.

Which one of the following is an advantage of using participative budgeting?

The master budget consists of a plan of action for a specified time period.

The production budget shows expected unit sales are 1,800.The required production units are 1,700.Which of the following represents possible inventory balances? a) $\quad$$\quad$$\quad$ 200 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 100 b) $\quad$$\quad$$\quad$ 100 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 200 c) $\quad$$\quad$$\quad$ 200 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 200 d) $\quad$$\quad$$\quad$$\quad$ 0 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 100

Which one of the following is correct concerning a budget period?

Razmataz Company makes and sells umbrellas.The company is in the process of preparing its Selling and Administrative Expense Budget for the last half of the year.The following budget data are available: Sales commissions \ Shipping Advertising Depreciation on office equipment Other operating expenses Variable Cost \ 0.60 \ 1.20 \ 0.30 \ 0.35 \3 ,000 \ 4,000 \ 34,000 Expenses are paid in the month incurred.If the company has budgeted to sell 2,000 umbrellas in October, how much is the total budgeted variable selling expenses for October?

What information is found on the direct materials budget? I.How many units of direct materials should be purchased? II.How much is the cost of direct materials to be purchased?

Which of the following statements about a budgeted income statement is true?

Which one of the following statements is true concerning the master budget for a not-for-profit company?

What information is reflected on the cash budget?

In what order are the following budgets prepared? IS.budgeted income statement P.production budget SA.selling and administrative budget MP.materials purchases budget

Use the following information for questions Livanos, Inc.reports all its sales on credit, and pays operating costs in the month incurred.Amounts for 2016 are: March April May June July Budgeted sales \ 300,000 \ 290,000 \ 320,000 \ 280,000 \ 210,000 Budgeted purchases \ 144,000 \ 120,000 \ 128,000 \ 132,000 \ 90,000 Customer amounts on account are collected 70% in the month of sale and 30% in the following month. -Cost of goods sold is 60% of sales. -Livanos purchases and pays for merchandise 40% in the month of acquisition and 60% in the following month. -Operating expenses are: Salaries, $50,000; Depreciation, $12,000; Rent, $15,000; and Utilities, $14,000. -Accounts payable is used only for inventory acquisitions. -How much cash will Livanos receive during May from customers?

A budget is more beneficial if accepted by lower level management.

Company A is a manufacturer and Company B is a merchandiser.What is the difference in the budgets the two entities will prepare?

Which one of the following sets of budgets are financial budgets?

The "bottoms-up" approach to budgeting is also referred to as which of the following?

Which statement below describes the budgeted balance sheet?