Exam 7: Introduction to Budgets and Preparing the Master Budget

Benjamin Company has the following data: Month Budgeted Sales January \ 108,000 February 132,000 March 144,000 April 120,000 Cost of goods sold average 60% of sales.The inventory at December 31 was $19,440.Desired ending inventory levels are 20% of next month's sales at cost.What is the desired ending inventory value at February 28?

Budgets that focus on the budgeted cost of activities required to produce and sell products are called ________.

What is the sequence of steps(order of preparation)for the financial budget?

When examining a master budget,where does a company find the planned expenditures for facilities and equipment?

The total amount of cash collections from customers by month appears on the ________.

The ________ budget focuses on the budgeted income statement and the supporting schedules.

A company identifies the following goals and objectives: Increase sales 10 percent each year. Increase profits 5 percent each year. Increase total plant assets 5 percent each year. Which of the following budgets identifies the overall goals and objectives of an organization?

Phillip Corporation has the following sales budget: Month Budgeted Sales May \ 84,000 June 100,000 July 92,000 August 110,000 September 90,000 Credit sales are 80% of total sales.Collections of credit sales are 80% in the month of sale,15% in the month after sale and 5% are never collected. Required: Prepare a schedule of cash collections for June,July and August.