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Exam 9: Profit Planning and Flexible Budgets

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Question 21

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If the initial cash budget indicates a cash deficiency, the company must go out of business.

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Question 22

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Ideally, managers are held accountable for controllable costs.

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Question 23

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Planning is looking ahead to see what actions should be taken to realize particular goals.

Suppose that a company has the following accounts receivable collection pattern: ​ All sales are on credit.If credit sales for January and February are $250,000 and $120,000 respectively, the cash collection for February is:

Which of the following is true of the master budget?

Forward Company makes all its sales on account.Forward's accounts receivable payment experience is as follows: Forward provided information on sales as follows: -What are the expected cash receipts in December?

Matching Identify each item as an advantage or disadvantage of budgeting. -improves communication and coordination

Control is achieved by comparing actual results with budgeted results on a periodic basis.

The _________________ is the comprehensive financial plan for the organization as a whole.

Forward Company makes all its sales on account.Forward's accounts receivable payment experience is as follows: Forward provided information on sales as follows: - What are the expected cash receipts in the month of November?

Cash receipts must be at least as much as sales.

Connor Company produces speaker systems for cars.Estimated sales (in units) in January are 40,000; in February 37,000; and in March 34,000.Each unit is priced at $60.Connor wants to have 35% of the following month's sales in ending inventory.That requirement was met on January 1. Each speaker system requires 3 boxes and 15 yards of wire.Boxes cost $4 each and wire is $0.60 per yard.Connor wants to have 20% of the following month's production needs in ending raw materials inventory.On January 1, Connor had 24,000 boxes and 100,000 yards of wire in inventory. -What is Connor's expected sales revenue for February?

Which of the following is true of myopic behavior?

A company has provided a sales budget for the next four months.It bases its production budget on the sales budget, and has a policy that each month's ending inventory of finished product must be equal to 25% of the following month's sales needs.The direct materials purchases budget is based on the production budget.The company's policy for each month's ending inventory of raw materials is that they must be equal to 10% of the following month's production needs for raw materials.Given this information, the company can prepare direct materials purchases budgets for how many months?

Connor Company produces speaker systems for cars.Estimated sales (in units) in January are 40,000; in February 37,000; and in March 34,000.Each unit is priced at $60.Connor wants to have 35% of the following month's sales in ending inventory.That requirement was met on January 1. Each speaker system requires 3 boxes and 15 yards of wire.Boxes cost $4 each and wire is $0.60 per yard.Connor wants to have 20% of the following month's production needs in ending raw materials inventory.On January 1, Connor had 24,000 boxes and 100,000 yards of wire in inventory. - How many boxes does Connor expect to purchase in January?

A __________________ is a moving 12-month budget.

Communication and coordination are served by budgets.

Which of the following is true of budgets?

Synergy Inc.produces plastic grocery bags.Synergy has developed a static budget for the month of July based on 10,000 direct labor hours.During the quarter, the actual activity was 12,000 direct labor hours.Data for July are summarized as follows: - What is the flexible budget variance for July?

Which budget is used to assess managerial efficiency?