Exam 9: How Are Operating Budgets Created

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Dryer Company's policy is to keep 25% of the next month's sales in ending inventory.If Dryer meets its ending inventory policy at the end of April and sales are expected to be 24,000 units in May and 41,000 units in June,how many units need to be produced in May?

(Multiple Choice)

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Question 61

Companies generally obtain sales forecasts from many different sources.

(True/False)

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Question 62

The budgeted balance sheet shows an estimate of the organization's profit for a given budget period.

(True/False)

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Question 63

Sawyer Inc.plans to sell 75,000 units in September and 165,000 units in October.Sawyer's policy is to keep 25% of the next month's sales in ending inventory.If the ending inventory in August was consistent with this policy,how many units should be produced in September?

(Multiple Choice)

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Question 64

A direct labor budget is regarded as the starting point for the master budget.

(True/False)

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Question 65

The first line that appears on the direct labor budget is:

(Multiple Choice)

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Question 66

The usual starting point in budgeting is the sales budget.

(True/False)

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Question 67

In general,the budgeted income statement is probably the most carefully scrutinized component of the master budget.

(True/False)

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Question 68

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Dryer Company's policy is to keep 25% of the next month's sales in ending inventory.If Dryer meets its ending inventory policy at the end of April and sales are expected to be 24,000 units in May and 41,000 units in June,how many units need to be produced in May?

Companies generally obtain sales forecasts from many different sources.

The budgeted balance sheet shows an estimate of the organization's profit for a given budget period.

Sawyer Inc.plans to sell 75,000 units in September and 165,000 units in October.Sawyer's policy is to keep 25% of the next month's sales in ending inventory.If the ending inventory in August was consistent with this policy,how many units should be produced in September?

A direct labor budget is regarded as the starting point for the master budget.

The first line that appears on the direct labor budget is:

The usual starting point in budgeting is the sales budget.

In general,the budgeted income statement is probably the most carefully scrutinized component of the master budget.

What Is Managerial Accounting

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How Does an Organization Use Activity-Based Costing to Allocate Overhead Costs

How Is Process Costing Used to Track Production Costs

How Do Organizations Identify Cost Behavior Patterns

How Is Cost-Volume-Profit Analysis Used for Decision Making

How Are Relevant Revenues and Costs Used to Make Decisions

How Is Capital Budgeting Used to Make Decisions

How Do Managers Evaluate Performance Using Cost Variance Analysis

How Do Managers Evaluate Performance in Decentralized Organizations

How Is the Statement of Cash Flows Prepared and Used

How Do Managers Use Financial and Nonfinancial Performance Measures

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