Exam 7: Introduction to Budgets and Preparing the Master Budget

For next year,Dummie Company has budgeted sales of 7,000 units,target ending inventory of 1,000 units and a beginning inventory of 300 units.How many units should be purchased?

Duke Company has the following information: Purchases are paid as follows: 10% in the month of purchase 50% one month after purchase 40% two months after purchase What is the estimated cash disbursement for purchases in May?

A major benefit of effective budgeting is that ________.

Happy Hotels operates a 100-room property in Palm Harbor,Florida.Occupancy rates average 97% in March and 90% in April.The average room rental rate is $150 per night.Expected revenues for April are ________.

Hightower Company has the following information: Purchases are paid as follows: 75% in the month of purchase 25% one month after purchase What is the expected balance in Accounts Payable on April 30?

Twilight Company has the following information: Purchases are paid as follows: 10% in the month of purchase 50% one month after purchase 40% two months after purchase What is the expected balance in Accounts Payable on May 31?

The following rule applies when preparing the cash budget.If available cash plus net cash receipts and disbursements is negative,then borrowing is necessary.

Budgeted performance goals generally provide a better basis for evaluating actual performance than past performance.

Haggle Company has a sales budget for next month of $400,000.Cost of goods sold is expected to be 35% of sales.All units are paid for in the month following purchase.The beginning inventory is $10,000 and an ending inventory of $12,000 is desired.Beginning accounts payable is $76,000.The cost of goods sold for next month is ________.

________ usually prepare and use the operating budget.________ focus on the financial budget.

A company is preparing the cash budget.To find the ending cash balance for a month,they should take the beginning cash balance and add ________.

Leno Company has the following information: Leno Company wants to maintain a minimum cash balance of $80,000. Required: Prepare a cash budget for July.

Which of the following is a component of the financial budget?

Accurate sales forecasting is essential to effective budgeting.

Full Hotels operates a 100-room property in Naples,Florida.Occupancy rates average 95% in March and 80% in April.The average room rental rate is $150 per night.Expected revenues for March are ________.

Participative budgeting is the active participation of all affected employees in the formulation of the budget.

The sales budget should be the responsibility of line management.

The first step in preparing the operating budget is the ________.

Broncos Company has the following information: Budgeted Expenses Per Month All cash expenses are paid as incurred.What are the total expenses budgeted for the month of April?

Goss Company is preparing a cash budget for the month of June.The following information is available: The minimum cash balance desired is $10,000.What is the cash balance on June 30,2010?