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Exam 9: The Master Budget

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Question 41

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Define operating budgets and financial budgets.List the specific budgets which are operating budgets.List the specific budgets which are financial budgets.

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Operating budgets:
1.sales budget
2.prod...

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Question 42

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Terrific Toys Company manufactures and sells children's skateboards.Each skateboard requires four bearings.For September,Terrific Toys Company has budgeted skateboard sales of 530 skateboards,while 570 skateboards are scheduled to be produced.Terrific Toys Company will begin September with 220 bearings in its beginning inventory.How many bearings should Terrific Toys Company purchase in September?

A) 310
B) 2,280
C) 2,500
D) 2,060

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Question 43

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Sander Enterprises prepared the following sales budget: The expected gross profit rate is 40% and the inventory at the end of February was $10,000.Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold. What is the desired ending inventory on May 31?

Willard's Department Store has budgeted cost of goods sold of $42,000 for its men's shorts in March.Management also wants to have $7,600 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?

The budgeted cash collections from credit customers generally only reflect sales made in the current month.

Lough Company prepared the following purchases budget: All purchases are paid for as follows: 20% two months after purchase,55% in the following month,and 25% in the month of purchase. What are the cash disbursements in August to account for the June purchases at Lough Company?

Which of the following items is a component of a cash payments budget?

McCoy Company wants to have an ending inventory of 7,000 units.McCoy Company has beginning inventory of 9,000 units and expects to sell 33,000 units.How many units should McCoy Company produce?

CatNap Company has two products: Kittyz and Katz.A March sales forecast projects 20,000 units of Kittyz and 15,000 units of Katz are going to be sold at prices of $15 and $12,respectively.The desired ending inventory of Kittyz is 20% higher than the beginning inventory,which was 2,000 units.How much are total March sales for Kittyz anticipated to be?

BusyBody Company expects its November sales to be 20% higher than its October sales of $180,000.Purchases were $110,000 in October and are expected to be $160,000 in November.All sales are on credit and are collected as follows: 35% in the month of the sale and 60% in the following month.Purchases are paid 40% in the month of purchase and 60% in the following month.The cash balance on November 1 is $13,500.The cash balance on November 30 will be

The first component of the operating budget is the production budget.

A lamp store purchased $3,800 of lamps in September.The store had $1,600 of lamps on hand at the beginning of September,and expected to have $1,300 of lamps at the end of September to cover part of anticipated October sales.What is the budgeted cost of goods sold for September?

Wriston Company is preparing its cash budget for the upcoming month.The beginning cash balance for the month is expected to be $12,000.Budgeted cash disbursements are $70,500,while budgeted cash receipts are $86,100.Wriston Company wants to have an ending cash balance of $40,000.The excess (deficiency) of cash available over disbursements for the month would be

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

Management uses budgets to express its plans and to assess how well the organization meets or exceeds its goals.

A company should ________ when projecting cash receipts for a given month.

Managers may intentionally build slack into the budget

A manager considers all of the following when he or she prepares the cash budget except

"Combined cash budget" is best defined by which of the following?

Roman Company is preparing its cash budget for the upcoming month.The budgeted beginning cash balance is expected to be $40,000.Budgeted cash receipts are $101,000,while budgeted cash disbursements are $123,000.Roman Company wants to have an ending cash balance of $45,000.How much would Roman Company need to borrow to achieve its desired ending cash balance?