FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 7: The Master Budget

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 41

Multiple Choice

Review LaterAdd Note

Review Later

Mickey Company has the following information: $\begin{array} { l c } \text { Month } & \text { Budgeted Purchases } \\\text { January } & \$ 26,800 \\\text { February } & 29,000 \\\text { March } & 30,520 \\\text { April } & 29,480 \\\text { May } & 27,680\end{array}$ Purchases are paid for in the following manner: $10 \%$ in the month of purch ase $50 \%$ in the month after purch as e $\mathbf { 4 0 } \%$ two months after purch as e is the estimated cash disbursement in March from January purchases.

A) $13,400
B) $10,720
C) $3,052
D) $12,208

Correct Answer

verified

Show Answer

Question 42

Multiple Choice

Review LaterAdd Note

Review Later

Sapphire Company has the following data: $\begin{array}{lc}\text { Month } & \text { Budgeted Sales } \\\text { January } & \$ 108,000 \\\text { February } & 132000 \\\text { March } & 144,000 \\\text { April } & 120,000\end{array}$ The gross profit rate is 40% and the inventory at the end of December was $19,000. Desired inventory levels are 30% of next month's sales at cost. is the expected total purchases budgeted for February.

A) $105,120
B) $81,360
C) $79,200
D) None of these answers is correct.

Correct Answer

verified

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

detail the planned expenditures for facilities, equipment, new products, and other long- term investments.

Unit sales of Product X are currently 10,000, while unit sales of Product Y are double those of Product X. The company's sales forecast will be , assuming sales of Product X increase by 10% and those of Product Y go up by 4,000 units.

The sales budget is the responsibility of line management.

Accurate sales forecasting is essential to effective budgeting.

All of the following are operating budgets except:

Felon Company expects a total of $20,000 sales in June. Of these, credit sales are expected to be $12,000. Collections are 50% in the month of sale, 40% in the month following the sale, and 5% two months following the sale. The remaining 5% is expected to be uncollectible. is the estimated cash collection in June from June sales.

A sales budget is a prediction of sales under a given set of conditions.

Viking Company has the following data: $\begin{array} { l l } \text { Month } & \text { Budgeted Sales } \\\text { January } & \$ 108,000 \\\text { February } & 132,000 \\\text { March } & 144,000 \\\text { April } & 120,000\end{array}$ The average mark- up on products is 40%, and the inventory at the end of December was $19,000. Desired inventory levels are 30% of next month's sales at cost. _ is the desired ending inventory for February.

All of the following are operating budgets except:

Line operating managers usually prepare and use the operating budget.

A capital budget is a periodic business plan that includes a coordinated set of detailed operating schedules and financial statements.

LeBron Company has the following information: $\begin{array}{ll}\text { Month } & \text { Budgeted Purchas es } \\\text { January } & \$ 26,800 \\\text { February } & 29,000 \\\text { March } & 30,520 \\\text { April } & 29,480 \\\text { May } & 27,680\end{array}$ Purchases are paid for in the following manner: 10% in the month of purchase 50% in the month after purchase 40% two months after purchase Is the expected balance in Accounts Payable as of March 31.

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

Budgeted purchases = beginning inventory + cost of goods sold - desired ending inventory.

An operating budget is the major part of a master budget that focuses on the income statement and its supporting schedules.

are components of a master budget.

A budget is a qualitative expression of a plan of action.

The financial budgets of a nonmanufacturing company include the capital budget,the cash budget, and the budgeted balance sheet.