Exam 10: Budgetary Planning

Which one of the following is the end-product of the operating budgets?

The following information is taken from the production budget for the first quarter: Beginning inventory in units 300 Sales budgeted for the quarter 114,000 Capacity in units of production facility 118,000 How many finished goods units should be produced during the quarter if the company desires 800 units available to start the next quarter?

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 is Livanos' May 31, 2016 budgeted Accounts Receivable?

Weaver, Inc.has budgeted direct materials purchases of $150,000 in March and $240,000 in April.Past experience indicates that the company pays for 70% of its purchases in the month of purchase and the remaining 30% in the next month.Other costs are all paid during the month incurred.During April, the following items were budgeted: Wages expense Purchase of office equipment Selling and administrative expenses Depreciation expense Accounts Receivable write-offs \ 75,000 36,000 24,000 18,000 10,000 How much is budgeted cash disbursements for April?

Which one of the following is one of the main purposes of preparing a cash receipts and disbursements budget?

Crown, Inc.administered its budget.What did the company do?

Companies that do NOT prepare cash budgets have significant cash deficiencies.

The shorter the budget period, the more reliable the estimates of future outcomes.

Secret Prizes, Inc.is planning to sell 200 buckets and produce 190 buckets during March.Each bucket requires 500 grams of plastic and one-half hour of direct labour.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 labour costs.Secret Prizes 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 labour for March?

Green Plants plans to sell 160 potted plants during April and 120 units in May.Green Plants keeps 15% of the next month's sales as ending inventory.How many units should Green Plants produce during April?

On what basis do not-for-profit entities budget?

The production budget must be completed before the materials purchases budget because the number of units to be produced must be known to determine how much material to buy.

Drive, Inc.determined its estimated production for the month is 300,000 units.Each unit requires 2 kilograms of material.The beginning direct materials are 1% of the current months expected needs.Ending inventory desired is 7,500 kilograms.How much are estimated direct materials purchases in kilograms?

Of the following items, which one is found as the bottom amount on an individual budget?

Which one of the following budgets would be used by all of the following entities: manufacturing firms, merchandise firms, service firms and not-for-profit organizations?

Swingers Company makes and sells widgets.The company is in the process of preparing its Selling and Administrative Expense Budget for the month.The following budget data are available: Variable Cost Sales commissions \ 1 \ 5,000 Shipping \ 3 Advertising \ 4 Executive salaries \ 60,000 Depreciation on office equipment \ 2,000 Other \ 2 \ 3,000 Expenses are paid in the month incurred.If the company has budgeted to sell 40,000 widgets in October, how much is the total budgeted selling and administrative expenses for October?

During December, the capital budget indicates a $280,000 purchase of equipment for cash.The ending November cash balance is budgeted to be $40,000.Cash receipts are $840,000, and cash disbursements are $610,000 during December.The company wants to maintain a minimum cash balance of $20,000.What is the minimum cash loan that must be planned to be borrowed from the Bank during December?

Orr Corporation's manufacturing costs for August when production was 750 units appears below: Direct material \ 7 per unit Direct labour \ 6,000 Variable overhead 3,000 Factory Depreciation 2,000 Factory supervisory salaries 7,000 Other fixed factory costs 1,500 How much is the budgeted manufacturing cost for a month when 500 units are produced?

Which of the following is needed to prepare a sales budget?

In preparing one of its budgets, Hartz, Inc.used information from both the direct materials and direct labour budgets.Which budget was Hartz preparing?