Exam 10: Budgetary Planning

Hargrow, Inc.makes and sells a single product, buckets.It takes 30 ounces of plastic to make one bucket.Budgeted production of buckets for the next three months is as follows: August 90,000 units, September 75,000 units, October 65,000 units.The company wants to maintain monthly ending inventories of plastic equal to 10% of the following month's production needs.On August 31, 195,000 ounces of plastic were on hand.The cost of plastic is $0.03 per ounce.How much is the ending inventory of plastic to be reported on the company's balance sheet at September 30?

Which one of the following is calculated on a direct labour budget?

Long-range plans reflect management's long-term plans encompassing five years or more.

During September, the capital expenditure budget indicates a $140,000 purchase of equipment for cash.The ending September cash balance from operations is budgeted to be $20,000.The company wants to maintain a minimum cash balance of $10,000.What is the minimum cash loan that must be planned to be borrowed from the bank during September?

Which budget is normally prepared first?

Which one of the following is the format of the cash budget?

The budget itself and the administration of the budget are the responsibility of management.

Which one of the following is a budget that would NEVER be prepared by a merchandising company?

Which one of the following sets includes only financial budgets?

Budgets promote efficiency and serve as a deterrent to waste.

The first budget prepared should be the sales budget.

Long-range plans are used primarily as an evaluation of specific results to be achieved.

Farley Company reported the following information for 2016: September October November December January Budgeted sales \ 240,000 \ 310,000 \ 290,000 \ 360,000 \ 200,000 All sales are on credit. -Customer amounts on account are collected 50% in the month of sale and 50% in the following month. How much is the November 30, 2016 budgeted Accounts Receivable?

Jaunty Company is preparing its budgeted balance sheet for the upcoming year.The proper time to prepare this budget is

In many companies, who is assigned the responsibility for coordinating the preparation of the budget?

Lewis Production is planning to sell 220 boxes of bricks and produce 200 boxes of bricks during May.Each box of bricks requires 20 kilograms of brick mix and a half hour of direct labour.Brick mix costs $5 per 100 kilograms and employees of the company are paid $12.00 per hour.Manufacturing overhead is applied at a rate of 120% of direct labour costs.Lewis Production has 600 kilograms of brick mix in beginning inventory and wants to have 800 kilograms of brick mix in ending inventory.What is the total amount to be budgeted for manufacturing overhead for the month?

Budgets, by their very nature, create a negative effect on human behaviour within companies because they imply that management is trying to control.

Which one of the following budgets would be prepared for a retail company but NOT for a manufacturer?

Sudler Production is planning to sell 600 boxes of ceramic tile, with production estimated at 580 boxes during May.Each box of tile requires 44 kilograms of clay mix and a quarter hour of direct labour.Clay mix costs $0.50 per kilogram and employees of the company are paid $15.00 per hour.Manufacturing overhead is applied at a rate of 110% of direct labour costs.Sudler has 2,600 kilograms of clay mix in beginning inventory and wants to have 3,000 kilograms in ending inventory.What is the total amount to be budgeted in kilograms for direct materials to be purchased for the month?

What is the purpose of the financing section of a cash budget?