Deck 10: Strategy and the Master Budget

Question 1

The common factors in successful budgets are all the following except:

A)Acceptance and support by key management people.
B)A sense of ownership by those assigned to carry it out.
C)The budgets are technically correct and reasonably accurate.
D)The budgets are created in a spreadsheet.

Answer 1

D

Question 2

The master budget for a given accounting period has all the following except:

A)Consisting of a series of operating and financial budgets.
B)Being considered the "grand plan of action" for the upcoming period.
C)Culminating in the production of pro forma financial statements.
D)Being an important planning document for many organizations.
E)Being used for long-term planning.

Answer 2

E

Question 3

Which of the following is not a potential benefit of having a sound budgeting process?

A)Improved decision-making.
B)Improved performance-evaluation process.
C)Improved coordination of business activities.
D)Improved motivation for company employees.
E)Lower acceptance rate for capital budgeting projects.

Answer 3

E

Question 4

Sales forecasts are the first step in the budgeting process of a merchandising firm because:

A)The revenue data is easiest to generate.
B)Sales information is precise in amount.
C)Sales personnel have the quickest access to data.
D)Sales forecasts are the most objective of all budgeted activities.
E)Almost all activities of a firm emanate from estimated sales demand.

Question 5

A plan showing the units of goods expected to be sold and the expected revenue from sales,which is the cornerstone of the master budget,is called the:

A)Cash budget.
B)Sales receipts budget.
C)Sales forecast.
D)Cash receipts budget.
E)Sales budget.

Question 6

Which of the following statements about budgeting is not true?

A)Budgeting is an aid to planning and control.
B)Budgets create standards for performance evaluation.
C)Budgets help coordinate the activities of the entire organization.
D)Budgeting forces managers to think ahead and formalize long-range objectives.
E)Budgeting eliminates the need for day-to-day monitoring of operations.

Question 7

The process of planning business actions in the near future and expressing them as formal plans is called:

A)Budgeting.
B)Cost accounting.
C)Managerial accounting.
D)Auditing.
E)Financial Accounting.

Question 8

Which of the following factors is least likely to be considered in preparing a sales budget?

A)Plant capacity.
B)General economic and industry conditions.
C)Past sales volume.
D)The cash budget.
E)Proposed selling expenses.

Question 9

An accounting statement that presents predicted amounts of the company's assets,liabilities,and stockholders' equity as of the end of the budget period is called a(n):

A)Master balance sheet.
B)Budgeted income statement.
C)Pro forma balance sheet.
D)Pro forma cash flow statement.
E)Operating balance sheet.

Question 10

Which of the following budgets must be completed before preparing a cash budget?

A)Capital expenditures budget.
B)Rolling budget.
C)Cash financing budget.
D)Pro forma balance sheet.
E)Pro forma income statement.

Question 11

Which of the following budgets is not a financial budget?

A)Sales budget.
B)Cash receipts budget.
C)Budgeted cash-flow statement.
D)Budgeted balance sheet.
E)Cash payments budget.

Question 12

All of the following are ways of setting the budget,except:

A)Negotiation-based budgeting.
B)Two-stage budgeting.
C)Participative budgeting.
D)Authoritative budgeting.
E)All of the above are ways of setting the budget.

Question 13

A comprehensive or overall formal plan for a business that includes specific plans for expected sales,the units of product to be produced,the merchandise (or materials)to be purchased,the manufacturing,selling,administrative,and general expense to be incurred,the long-term assets to be purchased,and the amounts of cash to be borrowed or loans to be repaid,as well as a budgeted income statement and balance sheet,is called a:

A)Master budget.
B)Kaizen budget.
C)Capital expenditures budget.
D)Continuous budget.
E)Operating budget.

Question 14

"Budgetary slack" occurs when:

A)Employees refuse to adhere to budgeted plans and operations.
B)The budget is so difficult to meet that employees slack-off from work.
C)An authoritative,or imposed,budgeting process is used.
D)Employees ask for resources in excess of what they need,in order to "meet" budget objectives.
E)Employees ask for fewer resources than they need,in order to continuously improve.

Question 15

Revision of a completed and approved budget:

A)Should be conducted whenever necessary.
B)Should occur only under very special circumstances.
C)Should be discouraged.
D)May discourage diligence in its initial preparation.
E)Is never needed under Kaizen budgeting.

Question 16

The practice of maintaining budgets for the same number of future periods,revising those budgets as each period is completed and adding a new budget each period,is called:

A)Master budgeting.
B)Short-term budgeting.
C)Zero-based budgeting.
D)Rolling budgets (or,rolling financial forecasts).
E)Kaizen (or continuous-improvement)budgeting.

Question 17

A plan that shows the cash balance on hand at the beginning of a budget period,expected cash flow from operations,cash flows from investing activities,cash flows from financing activities,and an ending cash balance is called a(n):

A)Capital budget.
B)Operating budget.
C)Financial flows budget.
D)Cash budget.
E)Cash receipts budget.

Question 18

A plan that states the units or costs of merchandise to be purchased by a retailer or wholesaler during the budget period is called a:

A)Production budget.
B)Merchandise purchases budget.
C)Accounts payable budget.
D)Cash payments budget.
E)Cost of goods sold budget.

Question 19

A master budget is typically prepared for:

A)A period of one year.
B)Top management only.
C)Headquarters only.
D)Strategic business units only.
E)Product lines only.

Question 20

A plan of dollar amounts to be spent on long-term projects is called a:

A)Cash budget.
B)Capital budget.
C)Rolling budget.
D)Sales budget.
E)Rolling financial forecast.

Question 21

Sales forecasting by its nature is:

A)Precise.
B)Deterministic in nature.
C)Objective.
D)Somewhat subjective.
E)Mechanical.

Question 22

The budgeted income statement and budgeted balance sheet benefit a business primarily in their ability to:

A)Meet stockholder requests for planning information from the organization.
B)Narrow the range of budgeted estimates.
C)Deal with uncertainty inherent in the budgeting process.
D)Summarize the impact of the firm's budgeted operations.
E)Satisfy the requirements of generally accepted accounting principles (GAAP).

Question 23

A "participative" budget is a(n):

A)Good communication device.
B)Relatively inexpensive approach to budget preparation.
C)"Top down" approach.
D)"Zero-based" approach.
E)Alternative budgeting approach to traditional budgeting.

Question 24

Which of the following is not an alternative approach to traditional budgeting practices?

A)Kaizen budgeting.
B)Zero-based budgeting (ZBB).
C)Activity-based budgeting (ABB).
D)Time-driven activity based budgeting (TDABB).
E)Operations budgeting.

Question 25

Unless properly controlled,a "bottom-up" budgeting process can lead to:

A)Tight (i.e. ,difficult-to-achieve)budgets.
B)Easy budget targets.
C)Excessive downward communication.
D)Reduced incentives for participation.
E)Reduced budget preparation time.

Question 26

Which one of the following is a budgeting approach that explicitly demands continuous improvement and incorporates all the expected improvements in the resultant budget?

A)Flexible budgeting.
B)Time-driven activity-based budgeting (TDABB).
C)Activity-based budgeting (ABB).
D)Kaizen budgeting.
E)Zero-base budgeting.

Question 27

Budgeting for production (i.e. ,units to be produced):

A)Is simply an extension of the sales forecast.
B)Is prepared after the materials purchases budget is prepared.
C)Involves the sales budget and both beginning and ending inventory amounts.
D)Is completely under the production manager's control.
E)Is the first major step in the budgeting process.

Question 28

Maintaining a constant production level in a firm has the advantage of:

A)Minimizing the amount of inventory held.
B)Allowing a stable employment level.
C)Meeting customers' changing expectations.
D)Supporting the organization's move to JIT (just-in-time).
E)Allowing the firm to compete successfully as a differentiator.

Question 29

Which one of the following is an external factor that would need to be considered in forming an initial budget proposal?

A)Changes in product design.
B)Introduction of a new product.
C)Changes in product mix.
D)Competitors' actions.
E)Adoption of a new manufacturing process.

Question 30

Zero-base budgeting (ZBB)differs from traditional budgeting in its requirement to:

A)Justify budgeted operations.
B)Consider the time-value of money.
C)Start the budgeting process from the lowest level of the organization,the "zero base."
D)Incorporate continuous-improvement standards.
E)Maximize the existence of budgetary slack.

Question 31

Which one of the following is a plan for acquiring and combining the resources needed to carry out the manufacturing operations that will allow the firm to satisfy its sales goals and have on hand the desired amount of inventory at the end of the budget period?

A)Direct materials usage budget.
B)Sales budget.
C)Direct labor budget.
D)Production budget.
E)Sales forecast.

Question 32

Which one of the following shows the direct materials required for production and their budgeted cost?

A)Direct materials usage budget.
B)Budgeted cost of goods sold.
C)Direct materials purchases budget.
D)Production budget.
E)Direct materials cost budget.

Question 33

Financial budgets include the:

A)Pro forma balance sheet.
B)Projected income statement.
C)Budgeted selling and administrative expenses.
D)Sales budget.
E)Budgeted retained earnings statement.

Question 34

Which of the following is not an advantage of using a "highly achievable target" when constructing budgets?

A)Increasing managers' commitment to achieving budget targets.
B)Increasing the risk that managers will engage in "earnings management" behavior.
C)Improving predictability of earnings or operating results.
D)Decreasing the cost of achieving organizational control.
E)Enhancing the usefulness of a budget as a planning and coordinating tool.

Question 35

The focal point in budgeting for a service organization is likely to be:

A)Capital assets acquisition.
B)Raw material utilization.
C)Human resource planning.
D)Profit maximization.
E)Goal definition.

Question 36

A negotiated budgeting process is:

A)Less effective than an authoritative budget.
B)An alternative way to express a "bottom-up" approach to budget preparation.
C)A combination of "top-down" and "bottom-up" approaches to budget preparation.
D)Less costly to implement than an imposed (i.e. ,authoritative)budget.
E)Is generally completed after one round of negotiation.

Question 37

The budgeted statement of cash flows does not include:

A)Cash inflows from the collection of receivables.
B)Cash outflows from purchases of direct materials.
C)Cash outflows for capital-expenditure projects.
D)All sales revenues.
E)Interest paid and interest received.

Question 38

Which one of the following is a budgeting process that requires managers to prepare budgets from ground zero?

A)Flexible budgeting.
B)Continuous budgeting.
C)Activity-based budgeting (ABB).
D)Kaizen budgeting.
E)Zero-base budgeting (ZBB).

Question 39

Budgeting provides all of the following except:

A)A means to communicate the organization's short-term goals to its employees.
B)Support for management functions of planning and coordinating activities.
C)A means to anticipate problems.
D)An ethical framework for decision-making.
E)A basis for motivating behavior.

Question 40

The authorization function of budgets is especially important for government and not-for-profit (NFP)entities,where budgeted amounts often serve both as approvals of planned activities (or programs)and as:

A)Measures of quality.
B)Indicators of performance.
C)Certification of actions.
D)Ceilings for expenditures.
E)The basis for establishing stock values.

Question 41

Gorberchev Food Processing expects to have 20,000 units of finished goods inventory on hand on March 31 and reports the following expected sales (in units)for the first four months:
For the budgeting period the company desires each month's finished goods ending inventory to be 20% of the next month's sales.
The budgeted production for finished goods during May should be:

A)112,000.
B)134,000.
C)140,000.
D)142,000.
E)146,000.

Question 42

Critics (e.g. ,The Beyond Budgeting Roundtable)of traditional budgeting assert that the budgeting process:

A)Reflects too much of a "bottom-up" process,which is costly and inefficient.
B)Puts too much pressure on individuals to attain the budget,at whatever cost.
C)Makes too much use of so-called linear compensation plans.
D)Unnecessarily incorporates excessive detail.

Question 43

The Johann's Professional Service Company expects 70% of sales for cash and 30% on credit.The company collects 80% of its credit sales in the month following sale,15% in the second month following sale,and 5% are not collected.Expected sales for June,July,and August are $54,000,$48,000,and $44,000,respectively.What are the company's expected total cash receipts in August?

A)$45,920.
B)$61,400.
C)$87,600.
D)$54,200.
$45,920 = ($44,000 x 0.7)+ ($54,000 x 0.3 x 0.8)+ ($48,000 x 0.3 x 0.15)

Question 44

Joe's Mart policy is to have 20% of the next month's sales on hand at the end of the current month.Projected sales for August,September,and October are 25,000 units,20,000 units,and 30,000 units,respectively.How many units must be purchased in September?

A)16,000.
B)17,000.
C)22,000.
D)26,000.
E)28,000.

Question 45

Doanne Food Processing expects to have 36,000 pounds of raw materials inventory on hand on March 31,the end of the current year.The company budgets the following production (in units)for the first four months of the coming year:
For the budgeting period,the firm desires each month's ending raw material inventory to be 10% of the next month's production needs.A finished unit requires three pounds of raw materials.
Budgeted purchases for raw materials during April should be:

A)224,000.
B)360,000.
C)363,000.
D)399,000.
E)435,000.

Question 46

Budgets can serve as the standard against which actual performance is measured.When compensation is based on this comparison,the organization is said to use:

A)Fixed performance contracts.
B)Rolling financial forecasts.
C)Continuous-improvement budgets.
D)Variable compensation contracts.
E)A linear compensation plan.

Question 47

Cripe Corporation maintains ending inventory for each month at 5% of the following month's sales.It predicted the following sales (in units)for the first four months of the coming year:
How many units should be produced in March?

A)2,810.
B)2,850.
C)2,970.
D)2,990.
E)4,250.

Question 48

Gorberchev Food Processing expects to have 20,000 units of finished goods inventory on hand on March 31 and reports the following expected sales (in units)for the first four months:
For the budgeting period the company desires each month's finished goods ending inventory to be 20% of the next month's sales.
The budgeted production for finished goods during April should be:

A)112,000.
B)120,000.
C)127,200.
D)128,000.
E)142,000.

Question 49

Worton Distributing expects its September sales to be 25% higher than its August sales of $150,000.Purchases were $100,000 in August and are expected to be $120,000 in September.All sales are on credit and are collected as follows: 30% in the month of the sale and 70% in the following month.Purchases are paid 25% in the month of purchase and 75% in the following month.The beginning cash balance on September 1 is $10,000.The ending cash balance on September 30 would be:

A)$56,250.
B)$56,500.
C)$65,250.
D)$66,250.
E)$76,250.

Question 50

Tony's Fashions forecasts sales of $300,000 for the quarter ended December 31.Its gross profit rate is 20% of sales,and its September 30 inventory is $100,000.If the December 31 inventory is targeted at $40,000,budgeted purchases for the quarter should be:

A)$140,000.
B)$160,000.
C)$180,000.
D)$200,000.
E)$240,000.

Question 51

Salich Manufacturing Corporation has provided the following sales budget information:
Cash sales are normally 40% of total sales and the credit sales are expected to be collected in the month following the month of sale.The amount of cash expected to be received from customers in September is:

A)$24.000.
B)$55,000.
C)$57,000.
D)$58,000.
E)$60,000.

Question 52

ACEM Hardware purchased 5,000 gallons of paint in March.The store had 1,500 gallons on hand at the beginning of March,and expects to have 1,000 gallons on hand at the end of March.What is the budgeted number of gallons to be sold during March?

A)3,500.
B)4,500.
C)5,000.
D)5,500.
E)7,500.

Question 53

Oracle Supply Co.supply forecasts purchases of 15,000 widgets in June.It sells the widget at $12.00 per unit.The company has 1,000 units on hand on June 1.The desired ending inventory of widgets on June 30 is to be 20% lower than the beginning inventory.Total June sales for widgets are anticipated to be:

A)$177,600.
B)$180,000.
C)$182,400.
D)$189,600.
E)$192,000.

Question 54

Wild West Fashion expects the total costs of goods sold to be $30,000 in November and $60,000 in December for one of its young adult suits.Management also wants to have on hand at the end of each month 10 percent of the expected total cost of sales for the following month.What dollar amount of suits should be purchased in November?

A)$26,000.
B)$27,000.
C)$33,000.
D)$36,000.
E)$60,000.

Question 55

A significant advantage of using either an activity-based budgeting (ABB)or a time-driven activity-based budgeting (TDABB)system is:

A)Reduction in the cost of developing budget amounts.
B)Estimation of the cost of unused capacity,as a by-product of the budgeting process.
C)Increased levels of budgetary slack,which has a positive influence on motivation.
D)Elimination of the need to generate a sales forecast for the upcoming period.
E)The incorporation of continuous-improvement standards within the budgets.

Question 56

Zero-base budgeting (ZBB):

A)Involves the review of changes made to an organization's original budget.
B)Does not provide a projection of annual expenditures.
C)Has as the primary objective to reduce budget expenditures to zero.
D)Involves rigorous review of each cost item before inclusion in the budget.
E)Emphasizes zero increase in expenditures.

Question 57

LeMinton Company expects the following credit sales for the first five months of the year: January,$25,000;February,$40,000;March,$30,000;April,$36,000,May $40,000.Experience has shown that payment for the credit sales is received as follows: 60% in the month of sale,25% in the first month after sale,12% in the second month after sale,and the remainder is uncollectible.How much cash can LeMinton Company expect to collect in March as a result of credit sales?

A)$18,000.
B)$28,600.
C)$30,000.
D)$31,000.
E)$32,040.

Question 58

Blake Company has $15,000 cash at the beginning of June and anticipates $50,000 in cash receipts and $34,500 in cash disbursements.The company requires a minimum cash balance of $20,000.Any excess cash over the minimum desired balance is used to pay down debts.Blake has an agreement with its bank to borrow as needed or to repay loans as funds become available.As of May 31,the company owes $15,000 to the bank.The balance of the loan on June 30 will be:

A)$4,500.
B)$9,500.
C)$15,000.
D)$19,500.
Cash balance before loan payoff: $30,500 = $15,000 + $50,000 - $34,500
$30,500 - $20,000 = $10,500 excess cash over minimum required $20,000 balance.
Use $10,500 to pay off loan and loan balance is then $15,000 - $10,500 = $4,500

Question 59

Doanne Food Processing expects to have 36,000 pounds of raw materials inventory on hand on March 31,the end of the current year.The company budgets the following production (in units)for the first four months of the coming year:
For the budgeting period,the firm desires each month's ending raw material inventory to be 10% of the next month's production needs.A finished unit requires three pounds of raw materials.
Budgeted purchases for raw materials during June should be:

A)414,000.
B)420,000.
C)426,000.
D)456,000.
E)498,000.

Question 60

Consistency between goals of the firm and the goals of its employees is:

A)Goal optimization.
B)Goal conformance.
C)Goal congruence.
D)Goal dispersion.
E)Goal compensation.

Question 61

Information pertaining to Yekstop Corp.'s sales revenue is presented below.
Management estimates that four percent of credit sales are eventually uncollectible.Of the collectible credit sales,sixty-five percent are likely to be collected in the month of sale and the remainder in the month following the sale.The company desires to begin each month with an inventory equal to seventy-five percent of the sales projected for the month.All purchases of inventory are on open account;thirty percent will be paid in the month of purchase,and the remainder paid in the month following the month of purchase.The purchase costs are approximately sixty percent of the selling prices.
Total budgeted inventory purchases in November are:

A)$258,750.
B)$316,350.
C)$384,000.
D)$489,150.
E)$527,250.

Question 62

Information pertaining to Yekstop Corp.'s sales revenue is presented below.
Management estimates that four percent of credit sales are eventually uncollectible.Of the collectible credit sales,sixty-five percent are likely to be collected in the month of sale and the remainder in the month following the sale.The company desires to begin each month with an inventory equal to seventy-five percent of the sales projected for the month.All purchases of inventory are on open account;thirty percent will be paid in the month of purchase,and the remainder paid in the month following the month of purchase.The purchase costs are approximately sixty percent of the selling prices.
Total budgeted cash collections in January are:

A)$556,512.
B)$375,216.
C)$421,728.
D)$464,006.
E)$502,568.

Question 63

Boone Co.'s sales are 20% for cash and 80% on credit.Credit sales are collected as follows: 40% in the month of sale,50% in the month after the sale,and 10% in the second month.On December 31,the accounts receivable balance is $54,000,of which $12,000 is from November sales.Total sales for January and February are budgeted to be $100,000 and $120,000,respectively.
What are the budgeted cash receipts for February?

A)$85,400.
B)$95,000.
C)$106,600.
D)$109,400.
E)$112,900.

Question 64

Fresplanade Co.had the following historical pattern for its credit sales:
75% collected in the month of sale
12% collected in the first month after sale
8% collected in the second month after sale
3% collected in the third month after sale
2% uncollectible
The sales on open account (credit sales)have been budgeted for the last six months of the year as shown below:
July $72,000
August $84,000
September $96,000
October $108,000
November $120,000
December $102,000
The estimated total cash collections during November from accounts receivable is:

A)$113,160.
B)$101,400.
C)$143,640.
D)$125,640.
E)$102,420.

Question 65

Information pertaining to Yekstop Corp.'s sales revenue is presented below.
Management estimates that four percent of credit sales are eventually uncollectible.Of the collectible credit sales,sixty-five percent are likely to be collected in the month of sale and the remainder in the month following the sale.The company desires to begin each month with an inventory equal to seventy-five percent of the sales projected for the month.All purchases of inventory are on open account;thirty percent will be paid in the month of purchase,and the remainder paid in the month following the month of purchase.The purchase costs are approximately sixty percent of the selling prices.
Budgeted December cash payments for December inventory purchases are:

A)$67,995.
B)$103,500.
C)$158,655.
D)$241,500.
E)$289,440.

Question 66

Information pertaining to Yekstop Corp.'s sales revenue is presented below.
Management estimates that four percent of credit sales are eventually uncollectible.Of the collectible credit sales,sixty-five percent are likely to be collected in the month of sale and the remainder in the month following the sale.The company desires to begin each month with an inventory equal to seventy-five percent of the sales projected for the month.All purchases of inventory are on open account;thirty percent will be paid in the month of purchase,and the remainder paid in the month following the month of purchase.The purchase costs are approximately sixty percent of the selling prices.
Budgeted cash payments in December for November inventory purchases are:

A)$76,625.
B)$94,905.
C)$115,200.
D)$161,280.
E)$221,445.

Question 67

Ardel Co.budgeted to sell 200,000 units of Zbox in September.Production of one unit of Zbox required two pounds of aluminum and five pounds of steel.The beginning inventory and the desired ending inventory in units are:
How many pounds of steel powder does Ardel Co.need to purchase during September if Ardel plans to manufacture 150,000 units of Zbox in September?

A)725,000 pounds.
B)745,000 pounds.
C)750,000 pounds.
D)755,000 pounds.
E)775,000 pounds.

Question 68

Fresplanade Co.had the following historical pattern for its credit sales:
75% collected in the month of sale
12% collected in the first month after sale
8% collected in the second month after sale
3% collected in the third month after sale
2% uncollectible
The sales on open account (credit sales)have been budgeted for the last six months of the year as shown below:
July $72,000
August $84,000
September $96,000
October $108,000
November $120,000
December $102,000
The estimated cash collections during July from July accounts receivable is:

A)$83,160.
B)$79,380.
C)$87,840.
D)$54,000.
E)$71,640.

Question 69

Information pertaining to Yekstop Corp.'s sales revenue is presented below.
Management estimates that four percent of credit sales are eventually uncollectible.Of the collectible credit sales,sixty-five percent are likely to be collected in the month of sale and the remainder in the month following the sale.The company desires to begin each month with an inventory equal to seventy-five percent of the sales projected for the month.All purchases of inventory are on open account;thirty percent will be paid in the month of purchase,and the remainder paid in the month following the month of purchase.The purchase costs are approximately sixty percent of the selling prices.
Total budgeted inventory purchases in December are:

A)$86,250.
B)$140,400.
C)$226,650.
D)$258,750.
E)$345,000.

Question 70

Information pertaining to Yekstop Corp.'s sales revenue is presented below.
Management estimates that four percent of credit sales are eventually uncollectible.Of the collectible credit sales,sixty-five percent are likely to be collected in the month of sale and the remainder in the month following the sale.The company desires to begin each month with an inventory equal to seventy-five percent of the sales projected for the month.All purchases of inventory are on open account;thirty percent will be paid in the month of purchase,and the remainder paid in the month following the month of purchase.The purchase costs are approximately sixty percent of the selling prices.
Budgeted cash payments in November for November inventory purchases are:

A)$76,625.
B)$94,905.
C)$115,200.
D)$161,280.
E)$221,445.

Question 71

Fresplanade Co.had the following historical pattern for its credit sales:
75% collected in the month of sale
12% collected in the first month after sale
8% collected in the second month after sale
3% collected in the third month after sale
2% uncollectible
The sales on open account (credit sales)have been budgeted for the last six months of the year as shown below:
July $72,000
August $84,000
September $96,000
October $108,000
November $120,000
December $102,000
The estimated cash collection during September from July,August,and September accounts receivable is:

A)$83,160.
B)$79,380.
C)$87,840.
D)$54,000.
E)$71,640.

Question 72

Information pertaining to Yekstop Corp.'s sales revenue is presented below.
Management estimates that 4 percent of credit sales are eventually uncollectible.Of the collectible credit sales,65 percent are likely to be collected in the month of sale and the remainder in the month following the sale.The company desires to begin each month with an inventory equal to 75 percent of the sales projected for the month.All purchases of inventory are on open account;30 percent will be paid in the month of purchase,and the remainder paid in the month following the month of purchase.The purchase costs are approximately 60 percent of the selling prices.
Total budgeted cash collections in December are:

A)$556,512.
B)$375,216.
C)$495,080.
D)$502,568.
E)$506,780.

Question 73

Ardel Co.budgeted to sell 200,000 units of Zbox in September.Production of one unit of Zbox required two pounds of aluminum and five pounds of steel.The beginning inventory and the desired ending inventory in units are:
How many units of Zbox are to be manufactured during September?

A)150,000.
B)189,000.
C)200,000.
D)201,000.
E)202,000.

Question 74

Information pertaining to Yekstop Corp.'s sales revenue is presented below.
Management estimates that four percent of credit sales are eventually uncollectible.Of the collectible credit sales,sixty-five percent are likely to be collected in the month of sale and the remainder in the month following the sale.The company desires to begin each month with an inventory equal to seventy-five percent of the sales projected for the month.All purchases of inventory are on open account;thirty percent will be paid in the month of purchase,and the remainder paid in the month following the month of purchase.The purchase costs are approximately sixty percent of the selling prices.
Budgeted January cash payments for December inventory purchases are:

A)$67,995.
B)$103,500.
C)$158,655.
D)$241,500.
E)$289,440.

Question 75

Fresplanade Co.had the following historical pattern for its credit sales:
75% collected in the month of sale
12% collected in the first month after sale
8% collected in the second month after sale
3% collected in the third month after sale
2% uncollectible
The sales on open account (credit sales)have been budgeted for the last six months of the year as shown below:
July $72,000
August $84,000
September $96,000
October $108,000
November $120,000
December $102,000
The estimated cash collection during August from July and August accounts receivable is:

A)$83,160.
B)$79,380.
C)$87,840.
D)$54,000.
E)$71,640.

Question 76

Ardel Co.budgeted to sell 200,000 units of Zbox in September.Production of one unit of Zbox required two pounds of aluminum and five pounds of steel.The beginning inventory and the desired ending inventory in units are:
How many pounds of aluminum does Ardel Co.need to purchase during September if Ardel plans to manufacture 150,000 units of Zbox in September?

A)143,000 pounds.
B)157,000 pounds.
C)286,000 pounds.
D)293,000 pounds.
E)300,000 pounds.

Question 77

Fresplanade Co.had the following historical pattern for its credit sales:
75% collected in the month of sale
12% collected in the first month after sale
8% collected in the second month after sale
3% collected in the third month after sale
2% uncollectible
The sales on open account (credit sales)have been budgeted for the last six months of the year as shown below:
July $72,000
August $84,000
September $96,000
October $108,000
November $120,000
December $102,000
The estimated total cash collections during October from accounts receivable is:

A)$113,160.
B)$101,400.
C)$143,640.
D)$125,640.
E)$102,420.

Question 78

Fresplanade Co.had the following historical pattern for its credit sales:
75% collected in the month of sale
12% collected in the first month after sale
8% collected in the second month after sale
3% collected in the third month after sale
2% uncollectible
The sales on open account (credit sales)have been budgeted for the last six months of the year as shown below:
July $72,000
August $84,000
September $96,000
October $108,000
November $120,000
December $102,000
The estimated total cash collections during December from accounts receivable is:

A)$113,160.
B)$101,400.
C)$143,640.
D)$125,640.
E)$102,420.

Question 79

Boone Co.'s sales are 20% for cash and 80% on credit.Credit sales are collected as follows: 40% in the month of sale,50% in the month after the sale,and 10% in the second month.On December 31,the accounts receivable balance is $54,000,of which $12,000 is from November sales.Total sales for January and February are budgeted to be $100,000 and $120,000,respectively.
What are the budgeted cash receipts for January?

A)$74,200.
B)$85,000.
C)$87,000.
D)$94,200.
E)$99,000.

Question 80

Brownsville Novelty Store prepared the following budget information for the month of May:
-Sales are budgeted at $360,000.All sales are on account and a provision for bad debts is made
Monthly at three percent of sales.
-Inventory was $84,000 on April 30 and an increase of $12,000 is planned for May 31.
- All inventory is marked to sell at cost plus fifty percent.
-Estimated cash disbursements for selling and administrative expenses for the month are $48,000.
-Depreciation for May is projected at $6,000.
Budgeted Cost of Goods Sold in May is:

A)$120,000.
B)$180,000.
C)$198,000.
D)$252,000.
E)$240,000.