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Exam 9: The Master Budget

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Question 81

Multiple Choice

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All of the following budgets are prepared by merchandising companies except

A) manufacturing overhead.
B) capital expenditures.
C) budgeted income statement.
D) cash.

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Question 82

Multiple Choice

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Natcher Corporation collects 30% of a month's sales in the month of sale, 55% in the month following sale, and 10% in the second month following sale. The company has found that 5% of their sales are uncollectible. Budgeted sales for the upcoming four months are: The amount of cash that will be collected in November is budgeted to be

A) $287,500.
B) $283,000.
C) $78,000.
D) $291,500.

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Question 83

True/False

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One of the key benefits of budgeting is that it forces managers to plan.

"The comprehensive budget" is best described by which term below?

The format of the "cost of goods sold, inventory, and purchases" budget is as follows:

Which of the following types of cash outlays has its own budget?

Dallas Corporation had beginning inventory of 19,500 units and expects sales of 85,000 units during the year. Desired ending inventory is 18,500 units. How many units should Dallas Corporation produce?

Which of the following statements about budgeting is not true?

Two Brothers Moving prepared the following sales budget: Credit collections are 25% in the month of sale, 60% in the month following the sale, and 10% two months following the sale. The remaining 5% is expected to be uncollectible. What are the total cash collections in June?

Budgets are used for all of the following, except

Strategic planning involves setting long-term goals that extend 5-10 years into the future.

Russell Company expects cash sales for July of $15,000, and a 22% monthly increase during August and September. Credit sales of $6,000 in July should be followed by 15% decreases during August and September. What are budgeted cash sales and budgeted credit sales for September?

The master budget includes both the operating budgets and the financial budgets.

Which of the following budgets projects cash inflows and outflows and the budgeted balance sheet?

The cash budget helps managers determine whether or not the company will need financing in a given month.

Feeney Furniture prepared the following sales budget: Credit collections are 15% two months following the sale, 50% in the month following the sale and 30% in the month of sale. The remaining 5% is expected to be uncollectible. What are the total cash collections in May?

Goddard's Department Store has budgeted cost of goods sold of $44,000 for its men's shorts in March. Management also wants to have $8,000 of men's shorts in inventory at the end of March to prepare for the summer season. Beginning inventory of men's shorts for March is expected to be $5,500. What dollar amount of men's shorts should be purchased in March?

Crafty Carpentry Company produces and sells a shelf for $25 each. The beginning inventory is 2,000 shelves, and the desired ending inventory is 2,200 shelves. If budgeted production is 12,500 shelves, what is the forecasted sales revenue from the shelves?

The ________ technique asks what a result will be if a predicted amount is not achieved or if an underlying assumption changes.

Goliath Company prepared the following purchases budget: All purchases are paid for as follows: 30% in the month of purchase, 45% in the following month, and 25% two months after purchase. What are the cash disbursements in August for June purchases?