Exam 7: Operating Budgets: Bridging Planning and Control

The sales budget for the Johnson Company indicates the following units to be sold: January 10,000 February 8,000 March 12,000 April 16,000 The company requires that ending inventory be equivalent to 20% of the following month's sales.If each unit is budgeted to have a cost of $4.50, the budgeted balance in the company's ending inventory account at March 31^st will be:

Which of the following is not a financial budget?

Cody Manufacturing started doing business on January 1^st of the current year.Cody estimates that its sales will be 9,000 units in the first quarter, 7,000 units in the second quarter, 14,000 units in the third quarter and 12,000 units in the fourth quarter.Cody's selling price is set at $20 per unit and is not expected to change during the year.Cody intends to have 10% of the next quarter's sales in its ending inventory each quarter.How many units should Cody budget for second quarter's production?

Multi-year budgets are strategic plans that specify the direction in which a company desires to head.

Financial budgets quantify the outcomes of operating budgets in summary financial statements.

Which of the following is not an example of conflicts created in the budgeting process?

Which of the following are questions marketing and production managers address when preparing the production budget?

An example of a cost center is a production plant.

The Crescent Company, a merchandising company, maintains a minimum cash balance of $25,000.Budgeted items for the 1^st quarter of 2013 includes the following: Beginning cash balance \ 32,000 Cash collections \ 530,000 Selling and Administrative Costs \ 450,000 Dividend Payment \ 50,000 Equipment Purchase \ 90,000 Depreciation expense \ 10,000 In order to maintain the minimum cash balance, the company will need to borrow:

Budgets are used to:

A profit center is an organizational unit that has control over revenues, costs, and long-term investment decisions.