Exam 5: Planning and Forecasting in a Manufacturing Setting

Myers Company is preparing the raw materials ending inventory budget.Which of the following items will Myers not need to complete the budget?

Morgan Manufacturing is preparing its cash budget for the second quarter.The inventory manager has provided the following amounts budgeted for materials purchases: The controller reports that Morgan pays for 20% of its purchases in the month of purchase, 60% in the month following purchase, and 20% in the second month after purchase.What are Morgan's budgeted cash payments for purchases in June?

Avery Manufacturing has the following sales budgets for the fourth quarter. The accounting manager has analyzed cash collections and determined that credit sales are collected 70% in the month of sale, 20% in the month following the sale, and 10% uncollectible.How much cash is Avery expected to collect in November?

Pro-forma financial statements are

Overhead is typically divided into which of the following components?

Indicate whether the following items are characteristics of imposed budgeting or participative budgeting.

Kandy Harts manufactures custom T-shirts.Each T-shirt can be imprinted front and back with photos, company logos or other information.Each T-shirt requires 2 ounces of ink, 15 minutes of direct labor (processing, folding, packaging), and a plastic bag for packaging.The following information is available regarding costs: Kandy applied overhead at a rate of $9.40 per direct labor hour, and fringe benefits for workers are an additional 20% of wages.What is the standard price of producing one short-sleeve T-shirt?

Which of the following is not a component of the master budget?

The master budget process begins with the

A company is preparing its cash budget for the first quarter of the year.It has $1,000 in cash at the beginning of the period.Cash sales for the quarter are budgeted at $30,000.Selling and administrative expenses are budgeted at $8,000, which includes $2,000 depreciation.Cash expenses are paid in the month incurred.Cash payment for inventory purchases are budgeted at $25,000.The desired cash balance on March 31 is $5,000.How much financing will the company need during the quarter?

A top-down budget approach is also referred to as

Phillip Co.manufactures decorative pillows designed for use on outdoor patios.Phillip requires that 30 percent of next month's sales be on hand at the end of each month.The following information is available regarding budgeted sales of pillows: What is budgeted production for May?

Murphy Company produces and sells only one product, heavy-duty cargo carriers for trucks.The company is preparing its selling and administrative expense budget for the month.The following information has been provided to assist in the budgeting process. All cash expenses are paid in the month they are incurred. Required: Murphy has budgeted to sell 5,000 units during July.Prepare the selling and administrative expense budget for July.

London Manufacturing Company expects the following sales in January, February, and March: The controller has determined that the company collects credit sales as follows: 60% in the month of sale, 30% in the first month after sale, 5% in the second month after sale, and 5% is expected to be uncollectible.How much cash will be collected from customers in March?

To prepare a pro-forma income statement, information is pulled from

Percy's Pickled Snacks produces several types of pickled vegetables.The company budgets for each quarter in the last month of the previous quarter.In early March, Percy is preparing the budget for pickled beets.Budgeted sales are 12,000 jars for April, 16,000 jars for May, and 19,000 jars for June.Each jar requires 1.2 pounds of beets.The pickling process takes 60 minutes for 20 jars.Because pressurized cooking is used, the processing is monitored by an employee at all times.Each jar of pickled beets sells for $15.00.Percy requires ending Finished Goods inventory equal to 25% of the following month's sales.Other information is as follows: What is Percy's cost of goods sold budget for April?

Martin, Inc.is preparing a direct labor budget for the next quarter.Which of the following items will Martin not need to complete the budget?

Which of the following items would most likely differ on the cash budget and the budgeted income statement?

Which of the following is not a component of the master budget?

Rowen Company pays 80% of its expenses in the month incurred.Rowen's controller has developed the following budgeted amounts budgeted for selling and administrative expenses for July: What amount will Rowen report on its July pro-forma income statement for selling and administrative expenses?