Exam 7: Introduction to Budgets and Preparing the Master Budget

When preparing the budgeted income statement,which of the following is the source for the amount of Cost of Goods Sold?

Paul Company's expected sales for April are $27,600.Other information follows: Budgeted Operating Expenses Amount Wages \ 2,000 Advertising 1,680 Patent amortization 1,440 Rent 2,560 Marketing 5\% of sales Which of the following operating expenses is a noncash expense?

Factors that affect employee acceptance of budgets include ________.

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

Jorgensen Company has the following data: Month Budgeted Sales April \ 154,000 May 160,000 June 142,000 July 136,000 Budgeted Operating Expenses Per Month Wages \ 12,600 Advertising 27,200 Depreciation 19,000 Rent 20,400 Freight-out 20\% of sales Sales commission 5\% of sales Required: Prepare a schedule of cash disbursements for operating expenses for April,May and June.All cash expenses are paid when incurred.

The master budget is a detailed and comprehensive analysis of the ________ of the ________ plan.

When preparing a budgeted balance sheet,the balance in the cash account is found on the ________.

Which schedule gives the expected sales under a given set of conditions?

What is the sequence of steps in preparing the master budget?

________ budgeting is when budgets are formulated with the active involvement of all affected employees.

Matthew Company has a sales budget for next month of $400,000.Cost of goods sold is expected to be 40% of sales.All units are paid for in the month following purchase.The beginning inventory is $5,000 and an ending inventory of $12,000 is desired.Beginning accounts payable is $76,000.The cost of goods sold for next month is ________.

Atkinson Company has the following information: Month Budgeted Sales January \ 76,000 February 85,000 March 92,000 April 80,000 Budgeted Operating Expenses Per Month Wages \ 15,000 Advertising 12,000 Depreciation 3,000 Other expenses 4\% of sales All cash expenses are paid as incurred.What are the total operating expenses budgeted for the month of April?

Accurate sales forecasting is essential to effective budgeting.

The final output of the financial budget is ________.

The elements of a financial budget for a merchandising firm include the capital budget,the cash budget and the budgeted balance sheet.

The cash budget begins with the ending cash balance from the previous period.

Mark Company has the following information: Month Budgeted Purchases January \ 40,000 February 29,000 March 30,520 April 29,480 May 27,680 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 in March from January purchases?

Decisions made during long-range planning include ________.

The schedule of cash disbursements for operating expenses does NOT have ________.

The McGraw Company has the following information available: Month Budgeted Sales June \ 68,000 July 72,000 August 74,000 September 76,000 October 78,000 The cost of goods sold rate is 65% and the desired ending inventory level is 25% of the next month's cost of sales. Required: Prepare a purchases and cost of goods sold budget for July,August and September.