Question 1

Other than prior years' sales, list two other factors that are often used in the development of a sales forecast.

Accepted Answer

Factors in

Question 2

Browning Inc. has projected the following sales information for the fourth quarter of 2013:   Credit sales are collected over a two-month period, with 60 percent collected in the month of sale and 40 percent collected in the month following sale.
Total cash collections for December are:

Accepted Answer

A)  $86,000 
B)  $54,000 
C)  $83,600 
D)  $68,000 
A)  $86,000 
B)  $54,000 
C)  $83,600 
D)  $68,000

Question 3

Which of the following is not considered in the preparation of a sales budget or sales forecast?

Accepted Answer

A)  General economic trends. 
B)  Anticipated marketing or advertising plans. 
C)  Issuance of the current year's financial statements. 
D)  Anticipated price changes in both purchasing costs and sales prices. 
A)  General economic trends. 
B)  Anticipated marketing or advertising plans. 
C)  Issuance of the current year's financial statements. 
D)  Anticipated price changes in both purchasing costs and sales prices.

Question 4

____ activities involve developing objectives and goals for the organization as well as the actual preparation of the budget.

Accepted Answer

A)  Operating 
B)  Control 
C)  Planning 
D)  Flexible 
A)  Operating 
B)  Control 
C)  Planning 
D)  Flexible

Question 5

Keep-it-Cool Products Inc. manufactures a medium-sized drink cooler. On June 30, the company had 800 coolers in inventory. The company's policy is to maintain a cooler inventory equal to 5% of next month's expected sales. The company expects the following sales activity for the third quarter of the year:   How many coolers should be produced in August?

Accepted Answer

A)  24,275 coolers 
B)  25,725 coolers 
C)  25,525 coolers 
D)  23,225 coolers 
A)  24,275 coolers 
B)  25,725 coolers 
C)  25,525 coolers 
D)  23,225 coolers

Question 6

Thurston Products Thurston Products sells a popular style of running shoe. The company has prepared the following sales forecast for the second quarter of 2012:
  Ending inventory at March 31, 2012 was budgeted at 7,500 pairs. Management would like the desired quantity of finished goods inventory at the end of each month to be equal to 15 percent of next month's budgeted unit sales. July's sales are projected to be 135,000 pairs.
Each completed unit of finished product requires 2 pounds of rubber material at a cost of $1.75 per pound. The company has determined that it needs 20 percent of next month's raw material needs on hand at the end of each month.
Refer to the Thurston Products information above. The total required production of running shoes for the second quarter of 2012 is:

Accepted Answer

A)  315,000 pairs 
B)  327,750 pairs 
C)  302,250 pairs 
D)  287,250 pairs 
A)  315,000 pairs 
B)  327,750 pairs 
C)  302,250 pairs 
D)  287,250 pairs

Question 7

In order to prepare a sales budget, a ____ is required.

Accepted Answer

A)  production budget 
B)  sales forecast 
C)  static budget 
D)  flexible budget 
A)  production budget 
B)  sales forecast 
C)  static budget 
D)  flexible budget

Question 8

Brady Inc. produced and sold 200,000 units for $50 each last year. For the upcoming year, management believes that if they decrease the price of each unit by 5%, volume will increase 5%. What are Brady's expected sales revenues for the upcoming year?

Accepted Answer

A)  $ 9,450,000 
B)  $10,000,000 
C)  $10,500,000 
D)  $ 9,975,000 
A)  $ 9,450,000 
B)  $10,000,000 
C)  $10,500,000 
D)  $ 9,975,000

Question 9

Robusto Coffee Traders Inc. sells prepackaged coffees to a variety of businesses throughout the East Coast. Robusto purchases the coffee in bulk from a wholesale distributor and packages the coffee themselves to sell to customers. The company expects to sell 120,000 and 135,000 one-pound packages of coffee during 2012 and 2013, respectively. The company had 6,000 one-pound packages on hand at the beginning of 2012, and the company has a policy of maintaining an ending inventory equal to 5 percent of the packages needed for next year's expected sales. How many packages of coffee should the company plan to purchase in 2012?

Accepted Answer

A)  126,750 
B)  120,750 
C)  119,250 
D)  255,000 
A)  126,750 
B)  120,750 
C)  119,250 
D)  255,000

Question 10

A budget built from the ground up each year rather than by simply adding a percentage increase to last year's numbers is called:

Accepted Answer

A)  a static budget. 
B)  a flexible budget. 
C)  a zero-based budget. 
D)  a master budget. 
A)  a static budget. 
B)  a flexible budget. 
C)  a zero-based budget. 
D)  a master budget.

Question 11

Keep-it-Hot Inc. manufactures popular thermoses. On June 30, the company had 1,000 thermoses in inventory. Each thermos sells for $8.00. The company's policy is to maintain a thermos inventory equal to 10% of next month's sales. The company expects the following sales activity for the third quarter of the year:
   In addition, October's sales are expected to be 9,000 units.
Required:

Accepted Answer

The answer of Keep-it-Hot Inc. manufactures popular thermoses. On June...

Question 12

Taylor Inc. sells and installs residential water heaters. Its customers pay for their water heaters over four months by paying in equal, monthly installments. The sales price of an installed water heater is $600. Taylor sold and installed the following number of water heaters in the first six months of 2013:   Cash receipts for June are expected to be:

Accepted Answer

A)  $ 74,850 
B)  $118,050 
C)  $ 47,850 
D)  $191,400 
A)  $ 74,850 
B)  $118,050 
C)  $ 47,850 
D)  $191,400

Question 13

In 2012, Truman Products sold 900,000 units at $9 each. Sales volume is expected to increase by 10 percent in 2013 while the price of each unit is expected to decrease by 15 percent. The expected sales revenue for 2013 is:

Accepted Answer

A)  $8,761,500 
B)  $1,336,500 
C)  $7,573,500 
D)  $6,885,000 
A)  $8,761,500 
B)  $1,336,500 
C)  $7,573,500 
D)  $6,885,000

Question 14

Cash outflows for overhead expenditures is shown on:

Accepted Answer

A)  the materials purchases budget. 
B)  the investing activity section of the cash summary budget. 
C)  the cash disbursements budget. 
D)  the cash receipts budget. 
A)  the materials purchases budget. 
B)  the investing activity section of the cash summary budget. 
C)  the cash disbursements budget. 
D)  the cash receipts budget.

Question 15

Which of the following budgets would be prepared by both manufacturing companies and merchandising companies?

Accepted Answer

A)  Production budgets 
B)  Direct material purchases budget 
C)  Sales budget 
D)  Manufacturing overhead budget 
A)  Production budgets 
B)  Direct material purchases budget 
C)  Sales budget 
D)  Manufacturing overhead budget

Question 16

Homestyle Interiors sells a variety of home furnishings including sleeper sofas. On March 31, the company had 225 sofas in inventory. The company's policy is to maintain a sleeper sofa inventory equal to 15% of next month's expected sales. The company expects the following sales activity for the second quarter of the year:   What is the projected production for May?

Accepted Answer

A)  1,600 sofas 
B)  1,105 sofas 
C)  1,585 sofas 
D)  1,615 sofas 
A)  1,600 sofas 
B)  1,105 sofas 
C)  1,585 sofas 
D)  1,615 sofas

Question 17

Which of the following statements is false regarding the process of preparing a sales forecast?

Accepted Answer

A)  It usually starts with last year's level of sales. 
B)  General economic trends are often considered. 
C)  Since it involves estimates of future events, accuracy is of little importance. 
D)  The larger the size and complexity of an organization, the more complex their sales forecasting system will be. 
A)  It usually starts with last year's level of sales. 
B)  General economic trends are often considered. 
C)  Since it involves estimates of future events, accuracy is of little importance. 
D)  The larger the size and complexity of an organization, the more complex their sales forecasting system will be.

Question 18

Milton Inc. has prepared the following first quarter sales forecast:   Each unit sells for $1.25.
The total budgeted sales for the first quarter is:

Accepted Answer

A)  $587,500 
B)  $470,000 
C)  $196,875 
D)  $156,250 
A)  $587,500 
B)  $470,000 
C)  $196,875 
D)  $156,250

Question 19

Grisham Products Inc. manufactures engines for small scooters. On September 30, the company had 1,050 engines in inventory. The company's policy is to maintain an ending inventory equal to 15% of next month's sales. Each engine manufactured requires 20 minutes of assembly and inspecting time at a cost of $1.50 per minute. Grisham applies overhead to engines at a rate of $2.50 per direct labor minute. The company expects the following sales activity for the fourth quarter of the year:
  What is the projected applied manufacturing overhead cost for November?

Accepted Answer

A)  $408,125 
B)  $843,625 
C)  $631,375 
D)  $737,500 
A)  $408,125 
B)  $843,625 
C)  $631,375 
D)  $737,500

Question 20

The comparison of actual outcomes with desired outcomes is an example of a(n):

Accepted Answer

A)  planning activity. 
B)  control activity. 
C)  operating activity. 
D)  static activity. 
A)  planning activity. 
B)  control activity. 
C)  operating activity. 
D)  static activity.

Other than prior years' sales, list two other factors that are often used in the development of a sales forecast.

Browning Inc. has projected the following sales information for the fourth quarter of 2013: Credit sales are collected over a two-month period, with 60 percent collected in the month of sale and 40 percent collected in the month following sale. Total cash collections for December are:

Which of the following is not considered in the preparation of a sales budget or sales forecast?

____ activities involve developing objectives and goals for the organization as well as the actual preparation of the budget.

In order to prepare a sales budget, a ____ is required.

Brady Inc. produced and sold 200,000 units for $50 each last year. For the upcoming year, management believes that if they decrease the price of each unit by 5%, volume will increase 5%. What are Brady's expected sales revenues for the upcoming year?

A budget built from the ground up each year rather than by simply adding a percentage increase to last year's numbers is called:

In 2012, Truman Products sold 900,000 units at $9 each. Sales volume is expected to increase by 10 percent in 2013 while the price of each unit is expected to decrease by 15 percent. The expected sales revenue for 2013 is:

Cash outflows for overhead expenditures is shown on:

Which of the following budgets would be prepared by both manufacturing companies and merchandising companies?

Which of the following statements is false regarding the process of preparing a sales forecast?

Milton Inc. has prepared the following first quarter sales forecast: Each unit sells for $1.25. The total budgeted sales for the first quarter is:

The comparison of actual outcomes with desired outcomes is an example of a(n):

Introduction to Managerial Accounting

Product Costing: Manufacturing Processes, Cost Terminology, and Cost Flows

Job Costing, Process Costing, and Operations Costing

Activity-Based Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs and Product Planning Decisions

Long-Term Capital Investment Decisions

Variance Analysis A Tool for Cost Control and Performance Evaluation

Decentralization, Performance Evaluation, and the Balanced Scorecard

Financial Statement Analysis

The Statement of Cash Flows

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Exam 9: The Use of Budgets in Planning and Decision Making

Other than prior years' sales, list two other factors that are often used in the development of a sales forecast.

Browning Inc. has projected the following sales information for the fourth quarter of 2013: Credit sales are collected over a two-month period, with 60 percent collected in the month of sale and 40 percent collected in the month following sale. Total cash collections for December are:

Which of the following is not considered in the preparation of a sales budget or sales forecast?

____ activities involve developing objectives and goals for the organization as well as the actual preparation of the budget.

In order to prepare a sales budget, a ____ is required.

Brady Inc. produced and sold 200,000 units for $50 each last year. For the upcoming year, management believes that if they decrease the price of each unit by 5%, volume will increase 5%. What are Brady's expected sales revenues for the upcoming year?

A budget built from the ground up each year rather than by simply adding a percentage increase to last year's numbers is called:

In 2012, Truman Products sold 900,000 units at $9 each. Sales volume is expected to increase by 10 percent in 2013 while the price of each unit is expected to decrease by 15 percent. The expected sales revenue for 2013 is:

Cash outflows for overhead expenditures is shown on:

Which of the following budgets would be prepared by both manufacturing companies and merchandising companies?

Which of the following statements is false regarding the process of preparing a sales forecast?

Milton Inc. has prepared the following first quarter sales forecast: Each unit sells for $1.25. The total budgeted sales for the first quarter is:

The comparison of actual outcomes with desired outcomes is an example of a(n):

Introduction to Managerial Accounting

Product Costing: Manufacturing Processes, Cost Terminology, and Cost Flows

Job Costing, Process Costing, and Operations Costing

Activity-Based Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs and Product Planning Decisions

Long-Term Capital Investment Decisions

Variance Analysis A Tool for Cost Control and Performance Evaluation

Decentralization, Performance Evaluation, and the Balanced Scorecard

Financial Statement Analysis

The Statement of Cash Flows

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