Managerial Accounting, 3e (Braun/Tietz) Chapter 9 The Master Budget

1) Strategic planning involves setting short-term goals extending three to four months into the future. Answer: FALSE iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget $) %udgeting is helpful to plan for cash inflows and outflows. Answer: '&+E iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget ,) A )udget is a -uantitative expression of a plan that helps managers coordinate and implement the plan. Answer: '&+E iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget .) %udgets do not provide )enchmar(s to help managers evaluate performance. Answer: FALSE iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget /) %udgets communicate financial plans throughout the compan*. Answer: '&+E iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 0) !ne of the (e* )enefits of )udgeting is that it forces managers to plan. Answer: '&+E iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget
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7) 'he capital expenditures )udget is not part of the operating )udget. Answer: '&+E iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 8) 'he master )udget is the set of )udgeted financial statements and supporting schedules for the entire organi9ation. Answer: '&+E iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget ") 'he master )udget includes )oth the operating )udgets and the financial )udgets. Answer: '&+E iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 12) :anagement uses )udgeting to express its plans and to assess how well it;s reaching its goals. Answer: '&+E iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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11) Strategic planning involves setting long-term goals that extend /-12 *ears into the future. Answer: '&+E iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1$) A rolling )udget is a )udget that is continuousl* updated so that the next 1$ months of operations are alwa*s )udgeted. Answer: '&+E iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1,) 'he financial )udgets pro<ect the collection and pa*ment of cash4 as well as forecast the compan*;s )udgeted )alance sheet. Answer: '&+E iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1.) %udget committees most often would include all of the following people except A) #E! %) &esearch and development manager #) Shareholder ) :ar(eting manager Answer: # iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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1/) %udgets are used for all of the following4 except A) planning for the future. %) controlling operations. #) recording actual results. ) directing operations. Answer: # iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 10) Strategic planning involves A) setting long-term goals that extend /-12 *ears into the future. %) setting short-term goals that extend one *ear into the future. #) setting goals for next month. ) executing directives from the )oard of directors. Answer: A iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 17) A rolling )udget is a )udget that A) extends /-12 *ears into the future. %) is continuousl* updated4 so that the next 1$ months of operations are alwa*s )udgeted. #) )egins with 9ero for each expense4 and then amounts are added in. ) is rolled out )* upper management. Answer: % iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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18) :ost companies use ======== when developing the )udgets each *ear. A) a top-down approach %) 9ero-)ased )udgets #) slac(-)ased )udgets ) participative )udgeting Answer: iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1") >hich of the following is a potential disadvantage of participative )udgeting? A) :anagers are more li(el* to )e motivated )* )udgets the* helped to create. %) :anagers ma* )uild slac( into the )udget. #) :anagers should have more detailed (nowledge for creating realistic )udgets. ) @one of the a)ove are true. Answer: % iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget $2) :anagers ma* intentionall* )uild slac( into the )udget A) to have the resources the* need in the event of )udget cuts. %) to ma(e their performance loo( worse. #) )ecause of certaint* a)out the future. ) )ecause of all of the a)ove. Answer: A iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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$1) :anagers ma* intentionall* )uild slac( into the )udget A) )ecause of uncertaint* a)out the future. %) to ma(e their performance loo( )etter. #) to have the resources the* need in the event of )udget cuts. ) )ecause of all of the a)ove. Answer: iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget $$) 'he )udget committee A) rarel* has the final sa* on the )udget. %) usuall* is made up of the accounting staff. #) usuall* is made up of managers from all areas of the value chain. ) usuall* is made up of the %oard of irectors. Answer: # iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget $,) All of the following are functions of the )udget committee except A) reviews su)mitted )udgets. %) determines the )onuses awarded to those who achieve )udget targets. #) approves the final )udget. ) removes unwarranted slac(. Answer: % iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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$.) >hich of the following is the starting place for )udgeting? A) Last *ear;s )udget %) Last *ear;s actual amounts #) Aero ) An* of the a)ove Answer: iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget $/) >hich of the following is an advantage of 9ero-)ased )udgeting? A) 5t is time consuming. %) 5t forces managers to <ustif* ever* dollar put in the )udget4 so some expenses ma* )e lower than the* were in previous *ears. #) 5t is la)or intensive. ) All of the a)ove are advantages. Answer: % iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget $0) 'he ======== )udget is part of the financial )udgets. A) cash %) sales #) direct materials ) operating expense Answer: A iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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$7) 'he ======== )udget is part of the financial )udgets. A) direct la)or %) capital expenditure #) )udgeted income statement ) manufacturing overhead Answer: % iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget $8) 'he ======== )udget is part of the financial )udgets. A) production %) )udgeted income statement #) )udgeted )alance sheet ) sales Answer: # iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget $") 'he ======== )udget is part of the operating )udgets. A) capital expenditure %) )udgeted )alance sheet #) production ) cash Answer: # iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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,2) >hich of the following alternatives reflects the proper order of preparing components of the master )udget? 1. 3roduction )udget $. Sales )udget ,. irect materials )udget A) $4 ,4 1 %) 14 ,4 $ #) ,4 14 $ ) $4 14 , Answer: iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget ,1) >hich of the following is an advantage of the )udgeting process? A) #oordinates the activities of the organi9ation %) Assures that the lowest cost materials will )e o)tained #) Assures the compan* will achieve its o)<ectives ) Buarantees that a profit will )e achieved Answer: A iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget ,$) &egarding the )udgeting process4 which of the following statements is true? A) 'he )udget should alwa*s )e designed )* top corporate management. %) 'he )udget should )e approved )* the compan*;s external auditors. #) 'he )udget should )e designed from the )ottom up4 with input from emplo*ees at all levels. ) All of the listed statements are true regarding the )udgeting process. Answer: # iff: 1 L!: "-1 E!#: S"-$ AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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,,) >hich of the following is a )enefit of )udgeting? A) Focuses management;s attention on the future %) 5mproved decision-ma(ing processes #) 5mproved motivation )* emplo*ees ) All of the a)ove Answer: iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget ,.) >hich of the following statements a)out )udgeting is not true? A) %udgeting is an aid to planning and control. %) 'he operating )udget should )e prepared )* top management4 rather than mid-management personnel4 )ecause the* have the overall o)<ectives of the compan* in mind. #) %udgets help to coordinate the activities of the entire organi9ation. ) %udgets promote communication and coordination )etween departments. Answer: % iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget ,/) >hich of the following alternatives reflects the proper order of preparing components of the master )udget? 1. Financial )udget $. !perating )udget ,. #apital expenditures )udget A) 14 ,4 $ %) $4 ,4 1 #) 14 $4 , ) ,4 14 $ Answer: % iff: $ L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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,0) >hich of the following )udgets is a ma<or part of the master )udget and focuses on the income statement and its supporting schedules? A) cash %) operating #) capital expenditures ) financial Answer: % iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget ,7) >hich of the following )udgets is the cornerstone of the master )udget? A) sales %) cash #) )udgeted )alance sheet ) operating expense Answer: A iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget ,8) CSets the targeted revenue and expenses for the periodC is )est descri)ed )* which of the following terms? A) &esponsi)ilit* center %) #apital )udget #) !perating )udget ) Sensitivit* anal*sis Answer: # iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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,") C'he comprehensive )udgetC is )est descri)ed )* which term )elow? A) !perating )udget %) Sensitivit* anal*sis #) &esponsi)ilit* center ) :aster )udget Answer: iff: 1 L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget .2) List and descri)e three reasons wh* a compan* and its managers could )enefit from the use of )udgeting. Answer: 1. 3lanning: 'he )udgeting process forces managers to spend time planning for the future4 rather than onl* concerning themselves with dail* operations. $. #oordination and #ommunication: 'he )udget coordinates a compan*;s activities. 5t forces managers to consider relations among operations across the entire value chain. ,. %enchmar(ing: %udgets provide a )enchmar( that motivates emplo*ees and helps managers evaluate performance. 'he )udget provides a target that most managers will tr* to achieve4 especiall* if the* participated in the )udgeting process and the )udget has )een set at a realistic level. iff: $ L!: "-1 E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget .1) >hen creating the sales )udget4 management simpl* ta(es the sales from the *ear )efore and divides that total )* 1$ months. 'hus4 each month will alwa*s predict the same amount of )udgeted sales. Answer: FALSE iff: 1 L!: "-$ E!#: E"-10 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget .$) 'he first component of the operating )udget is the production )udget. Answer: FALSE iff: 1 L!: "-$ E!#: E"-10 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget .,) 'he three components of the operating )udget are the sales )udgetD inventor*4 purchases and cost of goods sold )udgetD and the cash )udget. Answer: FALSE iff: 1 L!: "-$ E!#: E"-$, AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget
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..) 'he sales )udget must )e prepared after ever* other component of the operating )udget. Answer: FALSE iff: 1 L!: "-$ E!#: E"-10 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget ./) %udgeting includes planning for ending inventor*. Answer: '&+E iff: 1 L!: "-$ E!#: E"-18 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget .0) 'he sales )udget is the cornerstone of the master )udget. Answer: '&+E iff: 1 L!: "-$ E!#: E"-$, AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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.7) !n the production )udget4 the num)er of units to )e produced is computed as A) unit sales E desired end inventor* E )eginning inventor*. %) unit sales E desired end inventor* - )eginning inventor*. #) unit sales - desired end inventor* - )eginning inventor*. ) unit sales - desired end inventor* E )eginning inventor*. Answer: % iff: 1 L!: "-$ E!#: E"-18A AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget .8) !n the direct la)or )udget4 the total -uantit* of direct la)or hours needed is computed as A) units to )e produced F direct la)or hour per unit. %) -uantit* needed for production E indirect la)or hours - direct la)or hours. #) units to )e produced - indirect la)or hours F cost per la)or hour. ) estimated direct la)or hours needed F cost per hour. Answer: A iff: 1 L!: "-$ E!#: E"-18A AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget .") !n the direct materials )udget4 the total -uantit* of direct materials needed is computed as A) -uantit* needed for production E desired end inventor* of : - )eginning inventor* of :. %) units to )e produced E desired end inventor* of : - )eginning inventor* of :. #) units to )e produced - desired end inventor* of : E )eginning inventor* of :. ) -uantit* needed for production - desired end inventor* of : E )eginning inventor* :. Answer: A iff: 1 L!: "-$ E!#: E"-18A AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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/2) 'he ======== )udget is the onl* )udget stated !@LG in units4 not dollars. A) production %) sales #) direct materials ) manufacturing overhead Answer: A iff: 1 L!: "-$ E!#: E"-18A AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget /1) 'he ======== )udget starts with the num)er of units to )e produced. A) production %) operating expense #) direct materials ) All of these choices start with the num)er of units to )e produced. Answer: # iff: 1 L!: "-$ E!#: E"-$,A AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget /$) 'he ======== )udget )egins with the num)er of units to )e sold. A) manufacturing overhead %) direct materials #) production ) capital expenditures Answer: # iff: 1 L!: "-$ E!#: E"-10A AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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/,) >hich of the following )udgets usuall* shows separate sections for fixed and varia)le costs? A) irect materials and manufacturing overhead )udget %) :anufacturing overhead )udget and production )udget #) 3roduction )udget and manufacturing overhead )udget ) !perating expense )udget and manufacturing overhead )udget Answer: iff: 1 L!: "-$ E!#: E"-$,A AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget /.) >hich of the following )udgets or financial statements is part of the operating )udget? A) Sales )udget %) %udgeted )alance sheet #) #apital expenditures )udget ) #ash )udget Answer: A iff: 1 L!: "-$ E!#: E"-10 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget //) 'he ======== is a plan that shows the units to )e sold and the pro<ected selling price and is also the starting point in the )udgeting process. A) cash )udget %) )udgeted statement of cash flows #) )udgeted income statement ) sales )udget Answer: iff: 1 L!: "-$ E!#: E"-10 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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/0) >hich of the following is not part of the operating )udget? A) 5nventor*4 purchases and cost of goods sold )udget %) #ash )udget #) Sales )udget ) %udgeted income statement Answer: % iff: 1 L!: "-$ E!#: E"-$, AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget /7) >hich of the following is not included in the operating )udget? A) %udgeted income statement %) Sales )udget #) 5nventor* )udget ) %udgeted )alance sheet Answer: iff: 1 L!: "-$ E!#: E"-$, AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget /8) 5n preparing the operating )udget4 the first step is preparing the A) cash )udget. %) sales )udget. #) )udgeted income statement. ) purchases )udget. Answer: % iff: 1 L!: "-$ E!#: E"-$, AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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/") esired ending inventor* is $2H of next month;s sales. 5f cost of goods sold is I,224222 and next month;s sales is I"2242224 which of the following statements is true regarding purchases? A) 3urchases will )e more than cost of goods sold. %) 3urchases cannot )e predicted from the information given. #) 3urchases will )e less than cost of goods sold. ) 3urchases will e-ual cost of goods sold. Answer: % iff: $ L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 02) esired ending inventor* is $/H more than )eginning inventor*. 5f purchases total I10242224 which of the following statements is true regarding cost of goods sold J#!BS)? A) #!BS will exceed cost of goods availa)le for sale. %) #!BS will )e less than purchases. #) #!BS will exceed purchases. ) #!BS will e-ual I//4222. Answer: % iff: , L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 01) Lo*al 3et #ompan* expects to sell /4222 )eef* dog treats in Kanuar* and "4222 in Fe)ruar* for I, each. >hat will )e the total sales revenue reflected in the sales )udget for those months? A) Kanuar* I1/4222D Fe)ruar* I$74222 %) Kanuar* I14007D Fe)ruar* I,4222 #) Kanuar* I,4222D Fe)ruar* I14007 ) Kanuar* I$74222D Fe)ruar* I1/4222 Answer: A Explanation: A) Kanuar* /222 F I, L I1/4222D Fe)ruar* "222 F I , L I $74222 iff: 1 L!: "-$ E!#: E"-10 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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0$) :oc(ing)ird #ompan* expects to sell /4$22 )ird perches in Kanuar* and "4/22 in Fe)ruar* for I, each. >hat will )e the total sales revenue reflected in the sales )udget for those months? A) Kanuar* I147,,D Fe)ruar* I,4107 %) Kanuar* I1/4022D Fe)ruar* I$84/22 #) Kanuar* I,4107D Fe)ruar* I147,, ) Kanuar* I$84/22D Fe)ruar* I1/4022 Answer: % Explanation: %) Kanuar* /4$22 F I, L I1/4022D Fe)ruar* "4/22 F I , L I $84/22 iff: 1 L!: "-$ E!#: E"-10 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 0,) 6ewitt #ompan* expects cash sales for Kul* of I1/42224 and a $$H monthl* increase during August and Septem)er. #redit sales of I124222 in Kul* should )e followed )* ,2H increases during August and Septem)er. >hat are )udgeted cash sales and )udgeted credit sales for Septem)er respectivel*? A) I1"4/22 and I1$4$22 %) I$/4,/2 and I1.488. #) I$$4,$0 and I104"22 ) I184,22 and I1,4222 Answer: # Explanation: #) #ash sales I 1/4222 F 1.$$H L I 184,22 F 1.$$H L I $$4,$0D #redit sales I 124222 F 1.,2H L I 1,4222 F 1.,2 H L I 104"22 iff: $ L!: "-$ E!#: E"-10 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 0.) 3iatt #ompan* expects cash sales for Kul* of I1/42224 and a $0H monthl* increase during August and Septem)er. #redit sales of I1$4222 in Kul* should )e followed )* ,2H increases during August and Septem)er. >hat are )udgeted cash sales and )udgeted credit sales for Septem)er respectivel*? A) I1"4/22 and I1/41$2 %) I$/4,/2 and I1"42/1 #) I184"22 and I1/4022 ) I$,481. and I$24$82 Answer: Explanation: ) #ash sales I 1/4222 F 1.$0H L I 184"22 F 1.$0H L I $,481.D #redit sales I 1$4222 F 1.,2H L I 1/4022 F 1.,2 H L I $24$82 iff: $ L!: "-$ E!#: E"-10 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 0/) #at@ap #ompan* has two products: Mitt*9 and Mat9. A :arch sales forecast pro<ects $24222 units of Mitt*9 and 1/4222 units of Mat9 are going to )e sold at prices of I1/ and I1$4 respectivel*. 'he desired ending inventor* of Mitt*9 is $2H higher than the )eginning inventor*4 which was $4222 units. 6ow much are total :arch sales for Mitt*9 anticipated to )e? A) I1224222 %) I1824222 #) I,224222 ) I$.24222
1" #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

Answer: # Explanation: #) $24222 F I 1/ L I ,224222 iff: 1 L!: "-$ E!#: E"-10 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 00) og a*9 #ompan* has two products: ogg*9 and 3up9. A :arch sales forecast pro<ects $$4222 units of ogg*9 and 1/4222 units of 3up9 are going to )e sold at prices of I17./2 and I1$.224 respectivel*. 'he desired ending inventor* of ogg*9 is $2H higher than the )eginning inventor*4 which was $4222 units. 6ow much are total :arch sales for ogg*9 anticipated to )e? A) I1824222 %) I,8/4222 #) I$0.4222 ) I1124222 Answer: % Explanation: %) $$4222 F I 17./2 L I ,8/4222 iff: 1 L!: "-$ E!#: E"-10 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

$2 #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

07) &ussell #ompan* expects cash sales for Kul* of I1/42224 and a $$H monthl* increase during August and Septem)er. #redit sales of I04222 in Kul* should )e followed )* 1/H decreases during August and Septem)er. >hat are )udgeted cash sales and )udgeted credit sales for Septem)er? A) I184,22 and I/4122 %) I$$4,$0 and I.4,,/ #) I1$47/2 and I74,$2 ) I1248,8 and I84",2 Answer: % Explanation: %) #ash I1/4222 F 1.$$H L I 84,22 F 1.$$H L I$$4,$0D #redit I04222 F 8/H L I/4122 F 8/ H L I.4,,/ iff: $ L!: "-$ E!#: E"-10 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 08) Motric( #ompan* has )eginning inventor* of 1/4222 units and expected sales of $,4222 units. 5f the desired ending inventor* is 184222 units4 how man* units should )e produced? A) $24222 %) /04/22 #) 124222 ) $04222 Answer: Explanation: ) Sales $,4222 Less: %5 1/4222 L @eed to produce 84222 E desired E5 184222 L 'otal 3roduction $04222 iff: $ L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

$1 #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

0") :c#o* #ompan* wants to have an ending inventor* of 74222 units. :c#o* #ompan* has )eginning inventor* of "4222 units and expects to sell ,,4222 units. 6ow man* units should :c#o* #ompan* produce? A) ,14222 %) ,/4222 #) ."4222 ) .24222 Answer: A Explanation: A) Sales ,,4222 Less: %5 "4222 L @eed to produce $.4222 E desired E5 74222 L 'otal 3roduction ,14222 iff: $ L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 72) &u)ino #orporation desires a ecem)er ,1 ending inventor* of "22 units. %udgeted sales for ecem)er are $40/2 units. 'he @ovem)er ,2 inventor* was 8/2 units. >hat are )udgeted purchases in units? A) ,4//2 %) $4022 #) $4722 ) .4.22 Answer: # Explanation: #) Sales $40/2 Less: %5 8/2 L @eed to produce 14822 E desired E5 "22 L 'otal 3roduction $4722 iff: $ L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

$$ #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

71) %runer Stores wants to have /22 shovels in ending inventor* on ecem)er ,1. %udgeted sales for ecem)er are 14"/2 shovels. 'he @ovem)er ,2 inventor* was ,$2 shovels. 6ow man* shovels should %enson Stores purchase for ecem)er? A) $4772 %) 14772 #) $4./2 ) $41,2 Answer: Explanation: ) Sales 14"/2 Less: %5 ,$2 L @eed to produce 140,2 E desired E5 /22 L 'otal 3roduction $41,2 iff: $ L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 7$) #raft* #arpentr* #ompan* produces and sells a shelf for I$/ each. 'he )eginning inventor* is $4222 shelves4 and the desired ending inventor* is $4$22 shelves. 5f )udgeted production is 1$4/22 shelves4 what is the forecasted sales revenue from the shelves? A) I.174/22 %) I,274/22 #) I,174/22 ) I$274/22 Answer: % Explanation: %) 3roduction 1$4/22 E %5 $4222 'otal 3roduced 1.4/22 Less: E5 $4$22 +nit Sales 1$4,22 F I $/ L I ,274/22 iff: $ L!: "-$ E!#: E"-10 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

$, #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

7,) SportSupplies #orporation has )udgeted purchases of inventor* for ecem)er of I1.24222. Expected )eginning inventor* on ecem)er 1 and ending inventor* on ecem)er ,1 are I"24222 and I1$242224 respectivel*. 5f cost of goods sold averages 88H of sales4 what are )udgeted sales for ecem)er? A) I1$/4222 %) I"04822 #) I1",418$ ) I,"747$7 Answer: A Explanation: A) %5 I"24222 E 3urchases 1.24222 L Boods Availa)le $,24222 Less : E5 1$24222 L #ost of Boods Sold I1124222 @ow 88H F JSales) L I 1124222 Sales L I 1$/4/22 iff: $ L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 7.) >illard;s epartment Store has )udgeted cost of goods sold of I.$4222 for its men;s shorts in :arch. :anagement also wants to have I74022 of men;s shorts in inventor* at the end of :arch to prepare for the summer season. %eginning inventor* of men;s shorts for :arch is expected to )e I/4/22. >hat dollar amount of men;s shorts should )e purchased in :arch? A) I,"4"22 %) I..4122 #) I//4122 ) I$"4"22 Answer: % Explanation: %) #ost of Boods Sold I .$4222 E E5 74022 L Boods Availa)le ."4022 Less %5 /4/22 L 3urchases ..4122 iff: $ L!: "-$ E!#: E"-$2 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

$. #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

7/) Boddard;s epartment Store has )udgeted cost of goods sold of I..4222 for its men;s shorts in :arch. :anagement also wants to have I84222 of men;s shorts in inventor* at the end of :arch to prepare for the summer season. %eginning inventor* of men;s shorts for :arch is expected to )e I/4/22. >hat dollar amount of men;s shorts should )e purchased in :arch? A) I.04/22 %) I.14/22 #) I/74/22 ) I,24/22 Answer: A Explanation: A) #ost of Boods Sold I ..4222 E E5 84222 L Boods Availa)le /$4222 Less %5 /4/22 L 3urchases .04/22 iff: $ L!: "-$ E!#: E"-$2 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 70) 'homas #orporation recorded sales of I$224222 during :arch. :anagement expects sales to increase /H in April4 another $H in :a*4 and another 12H in Kune. #ost of goods sold is expected to )e 82H of sales. >hat is the )udgeted gross profit for Kune? A) I.741$. %) I.,40"7 #) I$,/40$2 ) I.$48.2 Answer: A Explanation: A) I $224222 F 1.2/H L $124222 F 1.2$H L $1.4$22 F 1.12H L I $,/40$2 @ow Sales F 82H L #ost of Boods Sold - 1884."0 L Bross 3rofit I .741$. iff: $ L!: "-$ E!#: E"-10 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

$/ #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

77) :eers #orporation had )eginning inventor* of $14222 units and expects sales of 704/22 units during the *ear. esired ending inventor* is 1"4/22 units. 6ow man* units should :eers #orporation produce? A) 784222 units %) ,04222 units #) 7/4222 units ) 1174222 units Answer: # Explanation: #) Sales I704/22 - %5 $14222 'otal needed //4/22 E E5 1"4/22 L 3roduction 7/4222 iff: $ L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 78) allas #orporation had )eginning inventor* of 1"4/22 units and expects sales of 8/4222 units during the *ear. esired ending inventor* is 184/22 units. 6ow man* units should allas #orporation produce? A) 8.4222 units %) .74222 units #) 804222 units ) 1$,4222 units Answer: A Explanation: A) Sales I8/4222 - %5 1"4/22 'otal needed 0/4/22 E E5 184/22 L 3roduction 8.4222 iff: $ L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

$0 #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

7") Sam;s 'o*s )udgeted sales of I,224222 for the month of @ovem)er and cost of goods sold e-ual to 82H of sales. %eginning inventor* for @ovem)er was I/24222 and ending inventor* for @ovem)er is estimated at I//4222. 6ow much are the )udgeted purchases for @ovem)er? A) I$./4222 %) I0/4222 #) I$,/4222 ) I1,/4222 Answer: A Explanation: A) 82 H x I ,224222 L I$.24222 #ost of Boods Sold Less %5 /24222 L 1"24222 E E5 //4222 L 3urchases I $./4222 iff: , L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 82) Fosnight Enterprises prepared the following sales )udget: :onth :arch April :a* Kune %udgeted Sales I04222 I1,4222 I1$4222 I1.4222

'he expected gross profit rate is ,2H and the inventor* at the end of Fe)ruar* was I124222. esired inventor* levels at the end of the month are $2H of the next month;s cost of goods sold. >hat is the desired )eginning inventor* on Kune 1? A) I8.2 %) I14082 #) I14"02 ) I"4822 Answer: # Explanation: #) Sales L 122H - ,2H Bross 3rofit L 72H #ost of Boods Sold J#BS) @ow: Kune Sales I1.4222 F 72H L "4822 J#BS) F $2H L I 14"02 iff: $ L!: "-$ E!#: E"-$2A AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 81) Fosnight Enterprises prepared the following sales )udget: :onth :arch April :a* Kune %udgeted Sales I04222 I1,4222 I1$4222 I1.4222
$7 #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

'he expected gross profit rate is ,2H and the inventor* at the end of Fe)ruar* was I124222. esired inventor* levels at the end of the month are $2H of the next month;s cost of goods sold. >hat is the desired ending inventor* on :a* ,1? A) I8.2 %) I"4822 #) I14082 ) I14"02 Answer: Explanation: ) Sales L 122H - ,2H Bross 3rofit L 72H #ost of Boods Sold J#BS) @ow: Kune Sales I1.4222 F 72H L "4822 J#BS) F $2H L I 14"02 iff: $ L!: "-$ E!#: E"-$2A AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

$8 #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

8$) Fosnight Enterprises prepared the following sales )udget: :onth :arch April :a* Kune %udgeted Sales I04222 I1,4222 I1$4222 I1.4222

'he expected gross profit rate is ,2H and the inventor* at the end of Fe)ruar* was I124222. esired inventor* levels at the end of the month are $2H of the next month;s cost of goods sold. >hat is the )udgeted cost of goods sold for :a*? A) I,4022 %) I.4$22 #) I$4.22 ) I84.22 Answer: Explanation: ) I 1$.222 F 72H L I 84.22 iff: $ L!: "-$ E!#: E"-18 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

$" #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

8,) Fosnight Enterprises prepared the following sales )udget: :onth :arch April :a* Kune %udgeted Sales I04222 I1,4222 I1$4222 I1.4222

'he expected gross profit rate is ,2H and the inventor* at the end of Fe)ruar* was I124222. esired inventor* levels at the end of the month are $2H of the next month;s cost of goods sold. >hat are the total purchases )udgeted for April? A) I84082 %) I124"$2 #) I84"02 ) I"4$.2 Answer: # Explanation: #) #ost of Boods Sold L I 1,4222 F 72H L I "4122 Ending 5nventor* L I1$4222 F 72H L 84.22 F $2H L I 14082 %eginning 5nventor* L I 1,4222 F 72H L "4122 F $2H L I 148$2 @ow: #BS I "4122 E E5 14082 - %5 148$2 L 3urchases I 84"02 iff: , L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

,2 #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

8.) Fosnight Enterprises prepared the following sales )udget: :onth :arch April :a* Kune %udgeted Sales I04222 I1,4222 I1$4222 I1.4222

'he expected gross profit rate is ,2H and the inventor* at the end of Fe)ruar* was I124222. esired inventor* levels at the end of the month are $2H of the next month;s cost of goods sold. >hat are the total purchases )udgeted for :a*? A) I841$2 %) I84"02 #) I84082 ) I124282 Answer: # Explanation: #) :a* %eginning 5nventor* L I 1$4222 F 72H L 84.22 F $2H L I 14082:a* Ending 5nventor* L I 1.4222 F 72H L "4822 F $2H L I 14"02 :a* #ost of Boods Sold L I 1$4222 F 72H L I 84.22 @ow I 84.22 E 14"02 - 14082 L I 84082 iff: , L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

,1 #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

8/) Sander Enterprises prepared the following sales )udget: :onth :arch April :a* Kune %udgeted Sales I84222 I1,4222 I1$4222 I1.4222

'he expected gross profit rate is .2H and the inventor* at the end of Fe)ruar* was I124222. esired inventor* levels at the end of the month are $2H of the next month;s cost of goods sold. >hat is the desired )eginning inventor* on Kune 1? A) I14..2 %) I14082 #) I141$2 ) I84.22 Answer: % Explanation: %) Sales L 122H - .2H Bross 3rofit L 02H #ost of Boods Sold J#BS) @ow: Kune Sales I 1.4222 F 02H L 84.22 J#BS) F $2H L I 14082 iff: $ L!: "-$ E!#: E"-$2A AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

,$ #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

80) Sander Enterprises prepared the following sales )udget: :onth :arch April :a* Kune %udgeted Sales I84222 I1,4222 I1$4222 I1.4222

'he expected gross profit rate is .2H and the inventor* at the end of Fe)ruar* was I124222. esired inventor* levels at the end of the month are $2H of the next month;s cost of goods sold. >hat is the desired ending inventor* on :a* ,1? A) I141$2 %) I14..2 #) I14082 ) I84.22 Answer: # Explanation: #) Sales L 122H - .2H Bross 3rofit L 02H #ost of Boods Sold J#BS) @ow: Kune Sales I1.4222 F 02H L 84.22 J#BS) F $2H L I 14082 iff: $ L!: "-$ E!#: E"-$2A AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

,, #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

87) Sander Enterprises prepared the following sales )udget: :onth :arch April :a* Kune %udgeted Sales I84222 I1,4222 I1$4222 I1.4222

'he expected gross profit rate is .2H and the inventor* at the end of Fe)ruar* was I124222. esired inventor* levels at the end of the month are $2H of the next month;s cost of goods sold. >hat is the )udgeted cost of goods sold for :a*? A) I74$22 %) I.4822 #) I$4.22 ) I84.22 Answer: A Explanation: A) I 1$4222 F 02H L I 74$22 iff: $ L!: "-$ E!#: E"-18 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

,. #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

88) Sander Enterprises prepared the following sales )udget: :onth :arch April :a* Kune %udgeted Sales I84222 I1,4222 I1$4222 I1.4222

'he expected gross profit rate is .2H and the inventor* at the end of Fe)ruar* was I124222. esired inventor* levels at the end of the month are $2H of the next month;s cost of goods sold. >hat are the total purchases )udgeted for April? A) I"4,02 %) I74..2 #) I74082 ) I74"$2 Answer: # Explanation: #) #ost of Boods Sold L I 1,4222 F 02H L I 74822 Ending 5nventor* L I 1$4222 F 02H L 74$22 x $2H L I 14..2 %eginning 5nventor* L I 1,4222 F 02H L 74822 F $2H L I 14/02 @ow: #BS I 74822 E E5 14..2 - %5 14/02 L 3urchases I 74082 iff: , L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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8") Sander Enterprises prepared the following sales )udget: :onth :arch April :a* Kune %udgeted Sales I84222 I1,4222 I1$4222 I1.4222

'he expected gross profit rate is .2H and the inventor* at the end of Fe)ruar* was I124222. esired inventor* levels at the end of the month are $2H of the next month;s cost of goods sold. >hat are the total purchases )udgeted for :a*? A) I840.2 %) I74082 #) I04"02 ) I74..2 Answer: Explanation: ) :a* %eginning 5nventor* L I 1$4222 F 02H L 74$22 F $2H L I 14..2 :a* Ending 5nventor* L I 1.4222 F 02H L 84.22 F $2H L I 14082 :a* #ost of Boods Sold L I 1$4222 F 02H L I 74$22 @ow I 74$22 E 14082 - 14..2 L I 74..2 iff: , L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget "2) A lamp store purchased I,4822 of lamps in Septem)er. 'he store had I14022 of lamps on hand at the )eginning of Septem)er4 and expected to have I14,22 of lamps at the end of Septem)er to cover part of anticipated !cto)er sales. >hat is the )udgeted cost of goods sold for Septem)er? A) I/4.22 %) I.4122 #) I04722 ) I,4/22 Answer: % Explanation: %) %5 I 14022 E 3urchases ,4822 L Boods Availa)le /4.22 Less : E5 14,22 L #ost of Boods Sold I.4122 iff: $ L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget "1) >arshaw #ompan* )udgets pa*roll at I,4022 per month plus a percentage of monthl* sales. 'he Kune operating expense )udget includes total pa*roll of I1,4$22 with )udgeted sales of I1024222. Sales for Kul* are )udgeted at I1824222 while purchases of inventor* for Kul* are )udgeted at I"/4222. epreciation and insurance for Kul* are estimated at I14222 and I0224 respectivel*. !ffice and administrative expenses related to purchasing inventor* are )udgeted at 12H of purchases for the month. 'he purchase of I$4/22 in e-uipment and I14/22 in furniture is expected in Kul*.
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'he Kul* pa*roll should )e )udgeted at A) I1.4.22. %) I1,4$22. #) I$$4/22. ) I1/4,22. Answer: A Explanation: A) 'otal 3a*roll I 1,4$22 - fixed pa*roll - ,4022 L varia)le pa*roll L I "4022 divided )* Sales L 0H Jpa*roll as a H of Sales) @ow: I 1824222 F 0H L I 124822 Naria)le 3a*roll E ,4022 Fixed L I 1.4.22 'otal 3a*roll iff: , L!: "-$ E!#: E"-$1 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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"$) >arshaw #ompan* )udgets pa*roll at I,4022 per month plus a percentage of monthl* sales. 'he Kune operating expense )udget includes total pa*roll of I1,4$22 with )udgeted sales of I1024222. Sales for Kul* are )udgeted at I1824222 while purchases of inventor* for Kul* are )udgeted at I"/4222. epreciation and insurance for Kul* are estimated at I14222 and I0224 respectivel*. !ffice and administrative expenses related to purchasing inventor* are )udgeted at 12H of purchases for the month. 'he purchase of I$4/22 in e-uipment and I14/22 in furniture is expected in Kul*. 'he total operating expenses )udgeted for Kul* are A) I$,4"22. %) I1.4822. #) I$/4/22. ) I1.4.22. Answer: # Explanation: #) 5nventor* I "/4222 12H L I"4/22 !ffice and Adm. Expense 'otal 3a*roll I1,4$22 - fixed pa*roll -,4022 L varia)le pa*roll L I "4022 divided )* Sales L 0H Jpa*roll as a H of Sales) @ow: I 1824222 F 0H L I 124822 E ,4022 L I 1.4.22 Naria)le 3a*roll Fixed 'otal 3a*roll

Finall* 3a*roll I 1.4.22 E !ffice and Adm. expense "4/22 E epreciation 14222 E 5nsurance 022 L 'otal !perating Expense I $/4/22 iff: , L!: "-$ E!#: E"-$, AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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",) >arshaw #ompan* )udgets pa*roll at I,4022 per month plus a percentage of monthl* sales. 'he Kune operating expense )udget includes total pa*roll of I1,4$22 with )udgeted sales of I1024222. Sales for Kul* are )udgeted at I1824222 while purchases of inventor* for Kul* are )udgeted at I"/4222. epreciation and insurance for Kul* are estimated at I14222 and I0224 respectivel*. !ffice and administrative expenses related to purchasing inventor* are )udgeted at 12H of purchases for the month. 'he purchase of I$4/22 in e-uipment and I14/22 in furniture is expected in Kul*. 5f the percentage of monthl* sales used in )udgeting pa*roll increases $/H4 what would the total pa*roll )udgeted for Kul* )e? A) I$242$/ %) I174122 #) I1,4/22 ) I1.4.22 Answer: % Explanation: %) Kune expense )udget total pa*roll Fixed pa*roll )udget Kune varia)le pa*roll )udget ivide )* Kune )udgeted sales !ld varia)le pa*roll )udget JH of month;s sales) 5ncrease in varia)le pa*roll expense Add !ld varia)le pa*roll )udget JH of month;s sales) @ew varia)le pa*roll )udget JH of month;s sales) Kul* )udgeted sales @ew varia)le pa*roll )udget JH of month;s sales) Kul* varia)le pa*roll )udget Fixed pa*roll )udget Kul* pa*roll I 1,4$22 I J,4022) I "4022 I 1024222 0H $/H 1 1$/H 0H 8H I 1824222 8H I 1,4/22 I ,4022 I 174122

iff: , L!: "-$ E!#: E"-$1 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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".) At the )eginning of the *ear4 3atio Living #orporation has //2 planters in inventor*. 'he compan* plans to sell /4$22 planters during the *ear and wants to have 14$22 planters in inventor* at the end of the *ear. 6ow man* planters must 3atio Living #orporation produce during the *ear? A) /48/2 %) 04.22 #) ,4./2 ) 04"/2 Answer: A Explanation: A) Sales I /4$22 %5 - //2 E5 E 14$22 3roduction I /48/2 iff: 1 L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget "/) At the )eginning of the *ear4 La(eview #orporation has 002 life vests in inventor*. 'he compan* wants to have $4122 vests in inventor* at the end of the *ear and plans to sell 04.22 life vests during the *ear. 6ow man* life vests must La(eview #orporation produce during the *ear? A) 84/22 %) ,40.2 #) 748.2 ) "4102 Answer: # Explanation: #) Sales I 04.22 %5 - 002 E5 E $4122 3roduction I 748.2 iff: 1 L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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"0) 'ot9 #ompan* produces <ump ropes. 'ot9 #ompan* has the following sales pro<ections for the upcoming *ear: First -uarter )udgeted <ump rope sales in units Second -uarter )udgeted <ump rope sales in units 'hird -uarter )udgeted <ump rope sales in units Fourth -uarter )udgeted <ump rope sales in units $14222 ,/4222 $$4222 ,24222

5nventor* at the )eginning of the *ear was .4$22 <ump ropes. 'ot9 #ompan* wants to have $2H of the next -uarter;s sales in units on hand at the end of each -uarter. 6ow man* <ump ropes should 'ot9 #ompan* produce during the first -uarter? A) 104822 %) $14222 #) $,4822 ) ,$4$22 Answer: # Explanation: #) +nit Sales $nd Otr ,/4222 F $2H L 74222 E5 Sales I $14222 %5 - .4$22 E5 E 74222 3roduction I $,4822 iff: $ L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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"7) Koll* #ompan* produces hula hoops. Koll* #ompan* has the following sales pro<ections for the upcoming *ear: First -uarter )udgeted hula hoop sales in units Second -uarter )udgeted hula hoop sales in units 'hird -uarter )udgeted hula hoop sales in units Fourth -uarter )udgeted hula hoop sales in units $$4122 $84222 $$4222 ,24222

Koll* #ompan* wants to have $/H of the next -uarter;s sales in units on hand at the end of each -uarter. 5nventor* at the )eginning of the *ear was /4/$/ hula hoops. 6ow man* hula hoops should Koll* #ompan* produce during the first -uarter? A) ,.40$/ %) $,4/7/ #) 104/7/ ) $$4122 Answer: % Explanation: %) +nit Sales $nd Otr $84222 F $/H L 74222 E5 Sales I $$4122 %5 - /4/$/ E5 E 74222 3roduction I $,4/7/ iff: $ L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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"8) ais* #ompan* manufactures dog collars. 'he following selected data relates to ais* #ompan*;s )udgeted sales and inventor* levels of the dog collars for the upcoming -uarter: !cto)er expected unit sales @ovem)er expected unit sales ecem)er expected unit sales !cto)er desired ending unit finished goods inventor* @ovem)er desired ending unit finished goods inventor* ecem)er desired ending unit finished goods inventor* $4222 $4022 $4$22 8/2 7$2 /$2

6ow man* dog collars should ais* #ompan* produce in @ovem)er? A) $4872 %) ,4,$2 #) .4172 ) $4.72 Answer: Explanation: ) Sales I $4022 %5 - 8/2 E5 E 7$2 3roduction $4.72 iff: $ L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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"") Nictoria #orporation manufactures -ualit* vases. %udgeted sales and production data for the vases are as follows: :onth 1 )udgeted unit sales :onth $ )udgeted unit sales :onth , )udgeted unit sales :onth 1 )udgeted unit production :onth $ )udgeted unit production :onth , )udgeted unit production &aw material re-uired for each finished unit Jin pounds) $4222 $4/22 ,4$22 $4.22 $4722 ,4.22 1

'he ending inventor* for each month should )e e-ual to $2H of the next month;s production needs. Each vase re-uires one pound of cla* in its manufacture. Nictoria #orporation has a polic* that the inventor* of cla* at the end of each month needs to )e e-ual to $2H of the production needs for the following month. At the )eginning of Kanuar*4 .82 pounds of cla* were in inventor*. 6ow man* pounds of cla* would Nictoria #orporation need to purchase in Fe)ruar*? A) $4002 %) $4".2 #) ,40$2 ) $48.2 Answer: Explanation: ) 3roduction :onth $ $4722 Less %5 J$4722 F $2H) - /.2 3lus E5 J,4.22 F $2H) E082 E-uals 3urchases $48.2 iff: $ L!: "-$ E!#: E"-1" AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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122) 'errific 'o*s #ompan* manufactures and sells children;s s(ate)oards. Each s(ate)oard re-uires four )earings. For Septem)er4 'errific 'o*s #ompan* has )udgeted s(ate)oard sales of /,2 s(ate)oards4 while /72 s(ate)oards are scheduled to )e produced. 'errific 'o*s #ompan* will )egin Septem)er with $$2 )earings in its )eginning inventor*. 6ow man* )earings should 'errific 'o*s #ompan* purchase for Septem)er? A) ,12 %) $4$82 #) $4/22 ) $4202 Answer: Explanation: ) 3roduction /72 F . L $4$82 - $$2 J%5) L $4202 iff: $ L!: "-$ E!#: E"-1" AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 121) %eloved %a)* #ompan* manufactures and sells children;s strollers. Each stroller re-uires eight screws. For Septem)er4 %eloved %a)* #ompan* will )egin Septem)er with ,82 screws in its )eginning inventor*. %eloved %a)* #ompan* has )udgeted stroller sales of /,2 strollers4 while /72 strollers are scheduled to )e produced. 6ow man* screws should %eloved %a)* #ompan* purchase for Septem)er? A) 1/2 %) .4182 #) .4".2 ) .4/02 Answer: % Explanation: %) 3roduction /72 F 8 L .4/02 - ,82 J%5) L .4182 iff: $ L!: "-$ E!#: E"-1" AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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12$) 'he 3orch #ushion #ompan* manufactures foam cushions. 'he num)er of cushions to )e produced in the upcoming three months follows: @um)er of foam cushions to )e produced in Kul* 1$4222 @um)er of foam cushions to )e produced in August 1/4222 @um)er of foam cushions to )e produced in Septem)er 124222 Each cushion re-uires $ pounds of the foam used as stuffing. 'he compan* has a polic* that the ending inventor* of foam each month must )e e-ual to $/H of the following month;s expected production needs. 6ow man* pounds of foam does 'he 3orch #ushion #ompan* need to purchase in August? A) $74/22 %) $24222 #) $$4/22 ) .$4/22 Answer: A Explanation: A) August 3roduction 1/4222 F $/H L ,47/2 Septem)er 3roduction 124222 F $/H L $4/22 @ow 3roduction August 1/4222 Less %5 - ,47/2 3lus E5 E $4/22 E-uals 3urchases 1,47/2 F $ pounds L $74/22 iff: $ L!: "-$ E!#: E"-1" AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 12,) :ight* #orporation manufactures end ta)les. Each end ta)le re-uires ./2 direct la)or hours in its production. :ight* #orporation has a direct la)or rate of I1/ per direct la)or hour. 'he production )udget shows that :ight* #orporation plans to produce 14222 end ta)les in :arch and 14122 end ta)les in April. >hat is the total com)ined direct la)or cost that should )e )udgeted for :arch and April? A) 84$/2 %) 74/22 #) 1/47/2 ) ,14/22 Answer: # Explanation: #) :arch production 14222 E April production 14122 'otal $4122 F ./ L 142/2 hours F I 1/ L I 1/47/2 iff: $ L!: "-$ E!#: E"-$1 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 12.) Fort* >in(s #orporation manufactures night stands. 'he production )udget shows that Fort* >in(s #orporation plans to produce 14$22 night stands in :arch and 142/2 night stands in April. Each night stand re-uires ./2 direct la)or hours in its production. Fort* >in(s #orporation has a direct la)or rate of I1$ per direct la)or hour. >hat is the total com)ined direct la)or cost that should )e )udgeted for :arch and April? A) 04,22 %) 74$22 #) $74222 ) 1,4/22
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Answer: Explanation: ) :arch production 14$22 E April production 142/2 'otal $4$/2 F ./ L 141$/ hours F I 1$ L I 1,4/22 iff: $ L!: "-$ E!#: E"-$1 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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12/) List the operating )udgets. escri)e the purpose of each of the )udgets listed and the order in which the* are prepared. escri)e how the )udgets are interrelated. Answer: 'he operating )udgets are as follows: 1. Sales )udget P shows the num)er of units to )e sold and the total sales revenue. $. 3roduction )udget P shows the num)er of units to )e produced to support the sales to )e made. ,. irect materials )udget P shows the amount and dollar amount of direct materials to )e purchased to support the production )udget. .. irect la)or )udget P shows the num)er of direct la)or hours re-uired to support the num)er of products to )e purchased from the production )udget. /. :anufacturing overhead )udget P shows the )udgeted manufacturing overhead to )e incurred to support the num)er of units )eing produced as denoted on the production )udget. 0. !perating expenses )udget P all research and development4 design4 mar(eting4 distri)ution4 and customer service costs will )e shown on the operating expenses )udget. 7. %udgeted income statement P is constructed after preparing all of the a)ove )udgets. 'he operating )udgets are the )udgets needed to run the dail* operations of the compan*. 'he operating )udgets culminate in a )udgeted income statement. 'he starting point of the operating )udgets is the sales )udget4 )ecause it affects most other components of the master )udget. After estimating sales4 manufacturers prepare the production )udget4 which determines how man* units need to )e produced. !nce production volume is esta)lished4 managers prepare the )udgets determining the amounts of direct materials4 direct la)or4 and manufacturing overhead that will )e needed to meet production. @ext4 managers prepare the operating expenses )udget. After all of these )udgets are prepared4 management will )e a)le to prepare the )udgeted income statement. iff: $ L!: "-$ E!#: E"-$, AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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120) #arlton #oo(ie #ompan* produces a hand-processed gourmet coo(ie that is made with organic sugar. Five J/) pounds of organic sugar are re-uired per )atch of gourmet coo(ies. 'he organic sugar costs I$..2 per pound. 'he compan* needs to have $2H of the following month;s production needs of organic sugar in ending inventor* so it is on hand to start each month. A total of 1$2 pounds of organic sugar are expected to )e on hand on April 1. 1. %udgeted production of the gourmet coo(ies for the first four months of the upcoming *ear is as follows: @um)er of )atches of coo(ies to )e produced in Kanuar* @um)er of )atches of coo(ies to )e produced in Fe)ruar* @um)er of )atches of coo(ies to )e produced in :arch @um)er of )atches of coo(ies to )e produced in April &e-uired: 3repare a direct materials )udget for organic sugar for each of the months in the second -uarter and for the second -uarter in total. 5nclude )oth the -uantit* of sugar to )e purchased and the cost of the purchases in each month. Answer: 022 7/2 822 722

iff: , L!: "-$ E!#: E"-$1 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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127) Fris)ee Enterprises produces fris)ees. Fris)ee Enterprises has the following sales pro<ections for the upcoming *ear: First -uarter )udgeted fris)ee sales in units Second -uarter )udgeted fris)ee sales in units 'hird -uarter )udgeted fris)ee sales in units Fourth -uarter )udgeted fris)ee sales in units $24222 ,/4222 $$4222 ,24222

5nventor* at the )eginning of the *ear was 04222 fris)ees. Fris)ee Enterprises wants to have ,2H of the next -uarter;s sales in units on hand at the end of each -uarter. 6ow man* fris)ees should Fris)ee Enterprises produce during the first -uarter? Show *our calculations. Answer: Finished goods inventor* at end of each -uarter4 as percent of next -uarter;s )udgeted unit sales ,2H Second -uarter )udgeted fris)ee sales in units ,/4222 First -uarter ending inventor* 124/22 First -uarter ending inventor* First -uarter )udgeted fris)ee sales in units %eginning fris)ee inventor* in units +nits to produce 124/22 $24222 J04222) $.4/22

iff: $ L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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128) %irch #ompan* manufactures coffee ma(ers. 'he following selected data relates to %irch #ompan*;s )udgeted sales and inventor* levels of the coffee ma(ers for the upcoming -uarter. 6ow man* coffee ma(ers should %irch #ompan* produce in @ovem)er? Show *our calculations. !cto)er expected unit sales @ovem)er expected unit sales ecem)er expected unit sales !cto)er desired ending unit finished goods inventor* @ovem)er desired ending unit finished goods inventor* ecem)er desired ending unit finished goods inventor* Answer: @ovem)er desired ending unit finished goods inventor* @ovem)er expected unit sales !cto)er desired ending unit finished goods inventor* +nits to produce 14222 14/22 ,4,22 822 "/2 022 "/2 14/22 J822) 140/2

iff: $ L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 12") Sall* Scooters manufactures and sells scooters. Each scooter re-uires two rear view mirrors. For Septem)er4 Sall* Scooters has )udgeted sales of .1/ scooters4 while ./2 scooters are scheduled to )e produced. Sall* Scooters will )egin Septem)er with $$2 rear view mirrors in its )eginning inventor*. 6ow man* rear view wheels should Sall* Scooters purchase for Septem)er? Answer: 082 %udgeted num)er of scooters to )e produced &ear view mirrors per scooter :irrors to )e used @um)er of mirrors in )eginning inventor* &ear view mirrors to purchase ./2 $ "22 J$$2) 082

iff: $ L!: "-$ E!#: E"-18 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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112) 3ristine Gards :anufacturing produces weed whac(ers. !n :arch ,14 3ristine Gards :anufacturing had 1.. weed whac(ers in inventor*. 'he compan* has a polic* that the ending inventor* in an* month must )e 1$H of the following month;s expected sales. 3ristine Gards :anufacturing expects to sell the following num)er of weed whac(ers in each of the next four months:

&e-uired: 3repare a production )udget for the second -uarter4 with a column for each month and for the -uarter. Answer:

iff: $ L!: "-$ E!#: E"-18 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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111) Flawless Lawns :anufacturing produces lawn edgers. 'he compan* has a polic* that the ending inventor* in an* month must )e 12H of the following month;s expected sales. !n :arch ,14 Flawless Lawns :anufacturing had 1.2 lawn edgers in inventor*. Flawless Lawns :anufacturing expects to sell the following num)er of lawn edgers in each of the next four months:

&e-uired: 3repare a production )udget for the second -uarter4 with a column for each month and for the -uarter. Answer:

iff: $ L!: "-$ E!#: E"-18 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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11$) 'im)er &un #ompan* has prepared the following forecasts of monthl* sales: Sales Jin units) January ,4.22 February .47"2 March ,4/72 April ,4$12

'im)er &un #ompan* has decided that the num)er of units in its inventor* at the end of each month should e-ual 82H of next month;s sales. 'he )udgeted cost per unit is I12. 6ow man* units should )e in Kanuar*;s )eginning inventor*? Answer: Kanuar* unit sales Ending inventor* JH next month;s sales) Kanuar* unit )eginning inventor*

,4.22 82H $47$2

iff: $ L!: "-$ E!#: E"-18 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 11,) A cash collections )udget is focused on the timing of cash receipts. Answer: '&+E iff: 1 L!: "-, E!#: E"-,1 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 11.) A compan*;s plan for purchases of propert*4 plant4 e-uipment4 and other long-term assets is part of the )udgeted )alance sheet. Answer: '&+E iff: 1 L!: "-, E!#: E"-,1 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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11/) 'he )udgeted cash collections from credit customers generall* onl* reflect sales made in the current month. Answer: FALSE iff: 1 L!: "-, E!#: E"-$0 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 110) 'he cash )udget is prepared )efore the operating )udget. Answer: FALSE iff: 1 L!: "-, E!#: E"-$0 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 117) 'he cash )udget is prepared )efore the )udgeted )alance sheet is prepared. Answer: '&+E iff: 1 L!: "-, E!#: E"-$0 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 118) 'he cash )udget helps managers determine whether or not the compan* will need financing in a given month. Answer: '&+E iff: 1 L!: "-, E!#: E"-$8 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 11") %udget committee is a what-if techni-ue that as(s what a result will )e if a predicted amount is not achieved or if an underl*ing assumption changes. Answer: FALSE iff: 1 L!: "-, E!#: E"-$0 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1$2) A compan* sells goods and offers credit terms of Cnet ,2 da*s.C >hat does this mean for the compan* that sold the goods? A) 5t does not have to ship the goods for ,2 da*s %) 5t cannot recogni9e the sales credit for ,2 da*s #) 5t offers a ,2H discount for customers that use credit cards. ) 'he customer has up to ,2 da*s to pa* )ac( the seller for the goods purchased without penalt*. Answer: iff: 1 L!: "-, E!#: E"-$0 AA#S%: &eflective 'hin(ing
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Learning !utcome: )udget

iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master

1$1) >hich of the following items would )e shown on a cash pa*ments )udget? A) %ad de)t expense %) epreciation expense #) #ash dividends ) Bains on sales of e-uipment Answer: # iff: 1 L!: "-, E!#: E"-$0 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1$$) >hich of the following t*pes of cash outla*s has its own )udget? A) #apital expenditures %) ividends #) 5ncome taxes ) All of the a)ove Answer: A iff: 1 L!: "-, E!#: E"-,1 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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1$,) All of the following are shown on the com)ined cash )udget except A) pro<ected cash )alance at the end of the month. %) pro<ected cash collections and cash pa*ments. #) pro<ected )orrowings and repa*ments. ) All of the a)ove are shown on the com)ined cash )udget Answer: iff: 1 L!: "-, E!#: E"-$8 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1$.) A compan* should ======== when pro<ecting cash receipts for a given month. A) include onl* cash collections from sales made in that month %) onl* list #! sales made in that month #) onl* list credit sales made in that month ) include cash to )e collected in that month regardless of when the sale was made Answer: iff: 1 L!: "-, E!#: E"-$8 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1$/) CFinancial )udgetC is )est descri)ed )* which of the following? A) A compan*;s plan for purchases of propert*4 plant and e-uipment4 and other long-term assets %) A )udget that pro<ects cash inflows and outflows and the end of period )udgeted )alance sheet #) A )udget that shows pro<ected sales4 purchases and operating expenses ) A s*stem for evaluating the performance of each responsi)ilit* center and its manager Answer: % iff: 1 L!: "-, E!#: E"-,2 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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1$0) C#apital expenditures )udgetC is )est descri)ed )* which of the following? A) etails as to how the compan* expects to go from the )eginning cash )alance to the desired ending cash )alance %) A s*stem for evaluating the performance of each responsi)ilit* center and its manager #) A compan*;s plan for purchases of propert*4 plant and e-uipment4 and other long-term assets ) A )udget that pro<ects cash inflows and outflows and the end of period )udgeted )alance sheet Answer: # iff: 1 L!: "-, E!#: E"-,, AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1$7) 'he ======== techni-ue as(s what a result will )e if a predicted amount is not achieved or if an underl*ing assumption changes. A) sensitivit* anal*sis %) ratio anal*sis #) ris( anal*sis ) strategic anal*sis Answer: A iff: 1 L!: "-, E!#: S"-$ AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1$8) C#ash )udgetC is )est defined )* which of the following? A) A compan*;s plan for purchases of propert*4 plant and e-uipment4 and other long-term assets %) etails as to how the compan* expects to go from the )eginning cash )alance to the desired ending cash )alance #) A s*stem for evaluating the performance of each responsi)ilit* center and its manager ) A )udget that pro<ects cash inflows and outflows and the end of period )udgeted )alance sheet Answer: % iff: 1 L!: "-, E!#: E"-$8 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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1$") >hich of the following )udgets pro<ects cash inflows and outflows and the )udgeted )alance sheet? A) 3urchases )udget %) #apital expenditures )udget #) Financial )udget ) #ash )udget Answer: # iff: 1 L!: "-, E!#: E"-$8 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1,2) >hich of the following is an example of a financial )udget? A) %udgeted )alance sheet %) Sales )udget #) %udgeted income statement ) !perating expenses )udget Answer: A iff: 1 L!: "-, E!#: E"-,1 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1,1) All of the following are considered when preparing the cash )udget except A) pa*ments for inventor*. %) cash receipts from customers. #) depreciation expense. ) cash pa*ments to suppliers. Answer: # iff: 1 L!: "-, E!#: E"-$8 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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1,$) 'he final step in the preparation of the financial )udget is the preparation of which of the following? A) :aster )udget %) #ash )udget #) !perating )udgets ) %udgeted )alance sheet Answer: iff: $ L!: "-, E!#: E"-$8 AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1,,) istri)ution #orporation collects .2H of a month;s sales in the month of sale4 //H in the month following sale4 and /H in the second month following sale. %udgeted sales for the upcoming four months are: April )udgeted sales :a* )udgeted sales Kune )udgeted sales Kul* )udgeted sales I1224222 I1/24222 I$,24222 I1824222

'he amount of cash that will )e collected in Kul* is )udgeted to )e A) I7$4222. %) I17"4/22. #) I$204222. ) I1"/4/22. Answer: # Explanation: #) :a* Sales I 1/24222 F /H L I 74/22 Kune Sales $,24222 F //H L 1$04/22 Kul* Sales 1824222 F .2H L 7$4222 'otal I $204222 iff: $ L!: "-, E!#: E"-$0 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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1,.) Eastern #orporation collects 12H in the second month following sale4 //H in the month following sale and ,/H of a month;s sales in the month of sale. %udgeted sales for the upcoming four months are: April )udgeted sales :a* )udgeted sales Kune )udgeted sales Kul* )udgeted sales I1224222 I1/24222 I$,24222 I1824222

'he amount of cash that will )e collected in Kul* is )udgeted to )e A) I0,4222. %) I$2.4/22. #) I17,4222. ) I1"74222. Answer: % Explanation: %) :a* Sales I 1/24222 F 12H L I 1/4222 Kune Sales $,24222 F //H L 1$04/22 Kul* Sales 1824222 F ,/H L 0,4222 'otal I $2.4/22 iff: $ L!: "-, E!#: E"-$0 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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1,/) @atcher #orporation collects ,2H of a month;s sales in the month of sale4 //H in the month following sale4 and 12H in the second month following sale. 'he compan* has found that /H of their sales are uncollecti)le. %udgeted sales for the upcoming four months are: August )udgeted sales Septem)er )udgeted sales !cto)er )udgeted sales @ovem)er )udgeted sales I,224222 I$824222 I,,24222 I$024222

'he amount of cash that will )e collected in @ovem)er is )udgeted to )e A) I$874/22. %) I$8,4222. #) I784222. ) I$"14/22. Answer: A Explanation: A) Sept. Sales I $824222 F 12H L I$84222 !ct. Sales ,,24222 F //H L 1814/22 @ov. Sales $024222 F ,2H L 784222 'otal I $874/22 iff: $ L!: "-, E!#: E"-$0 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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1,0) Sharon #orporation collects 1/H in the second month following sale4 ./H in the month following sale and ,/H of a month;s sales in the month of sale. 'he compan* has found that /H of their sales are uncollecti)le. %udgeted sales for the upcoming four months are: August )udgeted sales Septem)er )udgeted sales !cto)er )udgeted sales @ovem)er )udgeted sales I,224222 I$824222 I,,24222 I$024222

'he amount of cash that will )e collected in @ovem)er is )udgeted to )e A) I$804/22. %) I$8/4/22. #) I"14222. ) I$814/22. Answer: Explanation: ) Sept. Sales I $824222 F 1/H L I.$4222 !ct. Sales ,,24222 F ./H L 1.84/22 @ov. Sales $024222 F ,/H L "14222 'otal I $814/22 iff: $ L!: "-, E!#: E"-$0 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1,7) Einstein #ompan* is preparing its cash )udget for the upcoming month. 'he )eginning cash )alance for the month is expected to )e I1.4222. %udgeted cash receipts are I8.42224 while )udgeted cash dis)ursements are I7$4222. Einstein #ompan* wants to have an ending cash )alance of I.24222. 'he excess Jdeficienc*) of cash availa)le over dis)ursements for the month would )e A) I1724222. %) IJ$04222). #) I11$4222. ) I$04222. Answer: Explanation: ) %eginning #ash I 1.4222 #ash &eceipts E 8.4222 #ash is)ursements -7$4222 #ash Availa)le I $04222 iff: $ L!: "-, E!#: E,-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1,8) >riston #ompan* is preparing its cash )udget for the upcoming month. 'he )eginning cash )alance for the month is expected to )e I1$4222. %udgeted cash dis)ursements are I724/224 while )udgeted cash receipts are I804122. >riston #ompan* wants to have an ending cash )alance of I.24222. 'he excess Jdeficienc*) of cash availa)le over dis)ursements for the month would )e A) I$74022. %) I1084022. #) IJ$74022). ) I1124/22.
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Answer: A Explanation: A) %eginning #ash I 1$4222 #ash &eceipts E 804122 #ash is)ursements -724/22 #ash Availa)le I $74022 iff: $ L!: "-, E!#: E,-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1,") &oman #ompan* is preparing its cash )udget for the upcoming month. 'he )udgeted )eginning cash )alance is expected to )e I.24222. %udgeted cash receipts are I12142224 while )udgeted cash dis)ursements are I1$,4222. &oman #ompan* wants to have an ending cash )alance of I./4222. 6ow much would &oman #ompan* need to )orrow to achieve its desired ending cash )alance? A) I184222 %) I$74222 #) I$,4222 ) I0,4222 Answer: % Explanation: %) %eginning #ash I .24222 #ash &eceipts E1214222 #ash is)ursements -1$,4222 #ash Availa)le I 184222 esired %alance -./4222 %orrow L $74222 iff: $ L!: "-, E!#: E,-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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1.2) %roc(man #ompan* is preparing its cash )udget for the upcoming month. 'he )udgeted )eginning cash )alance is expected to )e I,/4222. %udgeted cash dis)ursements are I1$,42224 while )udgeted cash receipts are I1,24222. %roc(man #ompan* wants to have an ending cash )alance of I.84222. 6ow much would %roc(man #ompan* need to )orrow to achieve its desired ending cash )alance? A) I04222 %) I"24222 #) I.$4222 ) I//4222 Answer: A Explanation: A) %eginning #ash I ,/4222 #ash &eceipts E 1,24222 #ash is)ursements - 1$,4222 #ash Availa)le I .$4222 esired %alance - .84222 %orrow L 04222 iff: $ L!: "-, E!#: E,-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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1.1) %us*%od* #ompan* expects its @ovem)er sales to )e $2H higher than its !cto)er sales of I1824222. 3urchases were I1124222 in !cto)er and are expected to )e I1024222 in @ovem)er. All sales are on credit and are collected as follows: ,/H in the month of the sale and 02H in the following month. 3urchases are paid .2H in the month of purchase and 02H in the following month. 'he cash )alance on @ovem)er 1 is I1,4/22. 'he cash )alance on @ovem)er ,2 will )e A) I.4122. %) I/,4022. #) I074122. ) I.24122. Answer: # Explanation: #) !ct. Sales I 1824222 F 02H L 1284222 @ov. Sales 1824222 F 1.$H L $104222 F ,/H L 7/4022 'otal #ash &eceipts 18,4022 !ct. 3urchases I1124222 F 02H @ov. 3urchases 1024222 F .2H 'otal #ash is)ursements L 004222 L 0.4222 I 1,24222

%eginning #ash I 1,4/22 #ash &eceipts E 18,4022 #ash is)ursements - 1,24222 Ending #ash I 074122 iff: , L!: "-, E!#: E"-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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1.$) &omona #ompan* expects its @ovem)er sales to )e $2H higher than its !cto)er sales of I10/4222. All sales are on credit and are collected as follows: ,/H in the month of the sale and 02H in the following month. 3urchases were I1124222 in !cto)er and are expected to )e I1.24222 in @ovem)er. 3urchases are paid .2H in the month of purchase and 02H in the following month. 'he cash )alance on @ovem)er 1 is I1,4/22. 'he cash )alance on @ovem)er ,2 will )e A) I.04,22. %) I/"4822. #) I$42/2. ) I,$4822. Answer: % Explanation: %) !ct. Sales I 10/4222 F 02H L ""4222 @ov. Sales 10/4222 F 1.$H L 1"84222 F ,/H L 0"4,22 'otal #ash &eceipts 1084,22 !ct. 3urchases I1124222 F 02H L 004222 @ov. 3urchases 1.24222 F .2H L /04222 'otal #ash is)ursements I 1$$4222 %eginning #ash I 1,4/22 #ash &eceipts E 1084,22 #ash is)ursements - 1$$4222 Ending #ash I /"4822 iff: , L!: "-, E!#: E"-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1.,) Kune sales were I/4222 while pro<ected sales for Kul* and August were I04/22 and I742224 respectivel*. Sales are ,/H cash and 0/H credit. All credit sales are collected in the month following the sale. >hat are the expected collections for Kul*? A) I74"7/ %) I/4/$/ #) I048$/ ) I/4"7/ Answer: % Explanation: %) Kul* #ash Sales I 04/22 F ,/H L I $4$7/ #ash #ollections on account Kune /4222 F 0/H L ,4$/2 'otal #ollections I /4/$/ iff: $ L!: "-, E!#: E"-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1..) Kune sales were I04222 while pro<ected sales for Kul* and August were I84/22 and I742224 respectivel*. All credit sales are collected in the month following the sale. Sales are 7/H credit and $/H cash. >hat are the expected collections for Kul*? A) I84,7/ %) I7487/ #) I74,7/ ) I040$/ Answer:
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Explanation: ) Kul* #ash Sales I 84/22 F $/H L I $41$/ #ash #ollections on account Kune 04222 F 7/H L .4/22 'otal #ollections I 040$/ iff: $ L!: "-, E!#: E"-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1./) 3urchases for :a* were I0242224 while expected purchases for Kune and Kul* are I7/4222 and I"$42224 respectivel*. All purchases are paid ,/H in the month of purchase and 0/H the following month. At what amount are Kune pa*ments for purchases )udgeted? A) I0"47/2 %) I0/4$/2 #) I8042/2 ) I"74./2 Answer: % Explanation: %) :a* I 024222 F 0/H L I ,"4222 Kune 7/4222 F ,/H L $04$/2 'otal I 0/4$/2 iff: $ L!: "-, E!#: E"-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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1.0) Expected purchases for Kune and Kul* are I824222 and I"$42224 respectivel*. 3urchases for :a* were I024222. All purchases are paid ./H in the month of purchase and //H the following month. At what amount are Kune pa*ments for purchases )udgeted? A) I0"4222 %) I714222 #) I804022 ) I1124.22 Answer: A Explanation: A) :a* I 024222 F //H L I ,,4222 Kune 824222 F ./H L ,04222 'otal I 0"4222 iff: $ L!: "-, E!#: E"-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1.7) :cEwen #ompan* has )udgeted the following credit sales during the last four months of the *ear: Septem)er4 I104222D !cto)er4 I$$4222D @ovem)er I$14222D ecem)er4 I$.4222. Experience has shown that pa*ment for the credit sales is received as follows: $2H in the month of sale4 //H in the first month after sale4 $2H in the second month after sale4 and /H uncollecti)le. 6ow much cash can :cEwen #ompan* expect to collect in @ovem)er as a result of credit sales? A) I1/4,22 %) I1"4/22 #) I104,22 ) I1"47/2 Answer: % Explanation: %) Sept. I 104222 F $2H L I ,4$22 !ct. $$4222 F //H L 1$4122 @ov. $14222 F $2H L .4$22 'otal I1"4/22 iff: $ L!: "-, E!#: E"-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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1.8) For u)ins(* #ompan*4 experience has shown that pa*ment for the credit sales is received as follows: 12H in the month of sale4 0/H in the first month after sale4 $2H in the second month after sale4 and /H uncollecti)le. u)ins(* #ompan* has )udgeted the following credit sales during the last four months of the *ear: Septem)er4 I$24222D !cto)er4 I$.4222D @ovem)er I$$4222D ecem)er4 I$84222. 6ow much cash can u)ins(* #ompan* expect to collect in @ovem)er as a result of credit sales? A) I174822 %) I1"4022 #) I$14822 ) I$$4222 Answer: # Explanation: #) Sept. I $24222 F $2H L I .4222 !ct. $.4222 F 0/H L 1/4022 @ov. $$4222 F 12H L $4$22 'otal I$14822 iff: $ L!: "-, E!#: E"-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1.") Menned* Enterprises has )udgeted sales for the months of Septem)er and !cto)er at I1$24222 and I1/242224 respectivel*. :onthl* sales are 72H credit and ,2H cash. !f the credit sales4 $2H are collected in the month of sale and 82H are collected in the following month. >hat are the !cto)er cash collections from customers? A) I1,,4$22 %) I004222 #) I18"4222 ) I884$22 Answer: A Explanation: A) Sept. Sales I 1$24222 F 72H L 8.4222 F 82H L I074$22 !ct. Sales 1/24222 F 72H L 12/4222 F $2H L $14222 'otal collections on account #ash sales I 1/24222 F ,2H L ./4222 'otal #ash collected I 1,,4$22 iff: $ L!: "-, E!#: E"-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

72 #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

1/2) 6ammond;s #oo(ie 'oppings ma(es pa*ments on its inventor* purchases as follows: $/H in the month of purchase4 0/H in the following month4 and 12H in the second month following purchase. %udgeted inventor* purchases for Kune4 Kul*4 and August are I1/42224 I1"4222 and I$.42224 respectivel*. At what amount are cash pa*ments for inventor* in August )udgeted? A) I184/22 %) I748/2 #) I/4822 ) I1"48/2 Answer: Explanation: ) Kune I 1/4222 F 12H I 14/22 Kul* 1"4222 F 0/ H 1$4,/2 Aug. $.4222 F $/H 04222 'otal I 1"48/2 iff: $ L!: "-, E!#: E"-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1/1) #ave 6ardware;s forecasted sales for April4 :a*4 Kune4 and Kul* are I$2242224 I$,242224 I1"242224 and I$.242224 respectivel*. Sales are 0/H cash and ,/H credit with all accounts receiva)les collected in the month following the sale. #ost of goods sold is 7/H of sales and ending inventor* is maintained at I024222 plus 12H of the following month;s cost of goods sold. All inventor* purchases are paid $$H in the month of purchase and 78H in the following month. >hat are the cash collections )udgeted for Kune? A) I1/24/22 %) I1",4/22 #) I1$,4/22 ) I$2.4222 Answer: Explanation: ) :a* Sales I$,24222 F ,/H L 824/22 F 122H L I 824/22 Kune 1"24222 F ,/H L 004/22 F 22 L 22222 #ash Sales Kune I1"24222 F 0/H 1$,4/22 'otal #ash #ollected $2.4222 iff: , L!: "-, E!#: E"-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

71 #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

1/$) #ave 6ardware;s forecasted sales for April4 :a*4 Kune4 and Kul* are I$2242224 I$,242224 I1"242224 and I$.242224 respectivel*. Sales are 0/H cash and ,/H credit with all accounts receiva)les collected in the month following the sale. #ost of goods sold is 7/H of sales and ending inventor* is maintained at I024222 plus 12H of the following month;s cost of goods sold. All inventor* purchases are paid $$H in the month of purchase and 78H in the following month. >hat are the )udgeted cash pa*ments in Kune for inventor* purchases? A) I."/4222 %) I,1/47/2 #) I10.4,8/ ) I1074.1/ Answer: # Explanation: #) Ending 5nventor* April I024222 E J12H F 17$4/22) L I774$/2 :a* 024222 E J12H F 1.$4/22) L 7.4$/2 Kune 024222 E J12H F 1824222) L 784222 #ost of Boods Sold :a* I$,24222 F 7/H L 17$4/22 Kune 1"24222 F 7/H L 1.$4/22 Kul* $.24222 F 7/H L 1824222 #ost of Boods sold EEnding 5nventor* -%eginning 5nventor* L3urchases :a* I 17$4/22 7.4$/2 774$/2 10"4/22 F 78H 1,$4$12 Kune 1.$4/22 784222 7.4$/2 1.04$/2 F $$H ,$417/ L I 10.4,8/

#ash 3a*ments E iff: , L!: "-, E!#: E"-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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1/,) #ave 6ardware;s forecasted sales for AprilD :a*D KuneD and Kul* are I$224222D I$,24222D I1"24222D and I$.24222D respectivel*. Sales are 0/H cash and ,/H credit with all accounts receiva)les collected in the month following the sale. #ost of goods sold is 7/H of sales and ending inventor* is maintained at I024222 plus 12H of the following month;s cost of goods sold. All inventor* purchases are paid $$H in the month of purchase and 78H in the following month. >hat is the )alance of accounts pa*a)le on the Kune ,2 )udgeted )alance sheet? A) I,$417/ %) I1284$$/ #) I1.04$/2 ) I11.427/ Answer: Explanation: ) Kune sales #ost of goods sold JH of sales) Kune cost of goods sold Kul* sales #ost of goods sold JH of sales) Kul* cost of goods sold

1"24222 7/H I 1.$4/22 I $.24222 7/H I 1824222

Kune cost of goods sold Additional ending inventor* JH of next month;s cost of goods sold) Additional ending inventor* :inimum ending inventor* Kune )eginning inventor*Q:a* ending inventor* Kul* cost of goods sold Additional ending inventor* JH of next month;s cost of goods sold) Additional ending inventor* :inimum ending inventor* Kul* )eginning inventor*QKune ending inventor*

I 1.$4/22 12H I 1.4$/2 I 024222 I 7.4$/2 I 1824222 12H I 184222 I 024222 I 784222

Kune cost of goods sold Kul* )eginning inventor*QKune ending inventor* Kune )eginning inventor*Q:a* ending inventor* Kune purchases

I 1.$4/22 I 784222 I J7.4$/2) I 1.04$/2

Kune purchases 5nventor* pa*ments month after purchase Accounts pa*a)le )alance at the end of Kune

I 1.04$/2 78H I 11.427/

iff: , L!: "-, E!#: E"-$7 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1/.) 'wo %rothers :oving prepared the following sales )udget: :onth #ash Sales #redit Sales

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:arch April :a* Kune

I$24222 I,04222 I.$4222 I/.4222

I124222 I104222 I.24222 I.84222

#redit collections are $/H in the month of sale4 02H in the month following the sale4 and 12H two months following the sale. 'he remaining /H is expected to )e uncollecti)le. >hat are the total cash collections in :a*? A) I0$4022 %) I$24022 #) I0/4222 ) I704122 Answer: A Explanation: A) :arch Sales I 124222 F 12H L I14222 April Sales 104222 F 02H L "4022 :a* Sales .24222 F $/H L 124222 'otal I $24022 3lus :a* #ash Sales .$4222 'otal I 0$4022 iff: $ L!: "-, E!#: E"-$0 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

7. #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

1//) 'wo %rothers :oving prepared the following sales )udget: :onth :arch April :a* Kune #ash Sales I$24222 I,04222 I.$4222 I/.4222 #redit Sales I124222 I104222 I.24222 I.84222

#redit collections are $/H in the month of sale4 02H in the month following the sale4 and 12H two months following the sale. 'he remaining /H is expected to )e uncollecti)le. >hat are the total cash collections in Kune? A) I,74022 %) I804822 #) I"14022 ) I"04,22 Answer: # Explanation: #) Kune credit sales #redit collections month of sale #ollections from Kune credit sales :a* credit sales #redit collections month after sale #ollections from :a* credit sales April credit sales #redit collections $ months after sale #ollections from April credit sales Kune cash sales #ollections from Kune credit sales #ollections from :a* credit sales #ollections from April credit sales 'otal Kune cash collections

I .84222 $/H I 1$4222 I .24222 02H I $.4222 I 104222 12H I 14022 I /.4222 I 1$4222 I $.4222 I 14022 I "14022

iff: $ L!: "-, E!#: E"-$0 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

7/ #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

1/0) 'wo %rothers :oving prepared the following sales )udget: :onth :arch April :a* Kune #ash Sales I$24222 I,04222 I.$4222 I/.4222 #redit Sales I124222 I104222 I.24222 I.84222

#redit collections are $/H in the month of sale4 02H in the month following the sale4 and 12H two months following the sale. 'he remaining /H is expected to )e uncollecti)le. >hat is the total cash received in April from April sales? A) I.24222 %) I.4222 #) I,84/22 ) I$4/22 Answer: A Explanation: A) April credit sales #redit collections month of sale #ollections from April credit sales April cash sales #ollections from April credit sales 'otal cash received from April sales

I 104222 $/H I .4222 I ,04222 I .4222 I .24222

iff: $ L!: "-, E!#: E"-$0 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

70 #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

1/7) Feene* Furniture prepared the following sales )udget: :onth :arch April :a* Kune #ash Sales I$24222 I,04222 I.$4222 I/.4222 #redit Sales I124222 I104222 I.24222 I.84222

#redit collections are 1/H two months following the sale4 /2H in the month following the sale and ,2H in the month of sale. 'he remaining /H is expected to )e uncollecti)le. >hat are the total cash collections in :a*? A) I$14/22 %) I0,4/22 #) I0/4"22 ) I7/4022 Answer: % Explanation: %) :arch Sales I 124222 F 1/H L I14/22 April Sales 104222 F /2H L 84222 :a* Sales .24222 F ,2H L 1$4222 'otal I $14/22 3lus :a* #ash Sales .$4222 'otal I 0,4/22 iff: $ L!: "-, E!#: E"-$0 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

77 #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

1/8) Feene* Furniture prepared the following sales )udget: :onth :arch April :a* Kune #ash Sales I$24222 I,04222 I.$4222 I/.4222 #redit Sales I124222 I104222 I.24222 I.84222

#redit collections are 1/H two months following the sale4 /2H in the month following the sale4 and ,2H in the month of sale. 'he remaining /H is expected to )e uncollecti)le. >hat are the total cash collections in Kune? A) I,04822 %) I"24822 #) I804222 ) I"04022 Answer: % Explanation: %) Kune credit sales #redit collections month of sale #ollections from Kune credit sales :a* credit sales #redit collections month after sale #ollections from :a* credit sales April credit sales #redit collections $ months after sale #ollections from April credit sales Kune cash sales #ollections from Kune credit sales #ollections from :a* credit sales #ollections from April credit sales 'otal Kune cash collections I .84222 ,2H I 1.4.22 I .24222 /2H I $24222 I 104222 1/H I $4.22 I /.4222 I 1.4.22 I $24222 I $4.22 I "24822

iff: $ L!: "-, E!#: E"-$0 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

78 #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

1/") Feene* Furniture prepared the following sales )udget: :onth :arch April :a* Kune #ash Sales I$24222 I,04222 I.$4222 I/.4222 #redit Sales I124222 I104222 I.24222 I.84222

#redit collections are 1/H two months following the sale4 /2H in the month following the sale4 and ,2H in the month of sale. 'he remaining /H is expected to )e uncollecti)le. >hat is the total cash received in April from April sales? A) I.4822 %) I,"4222 #) I,4222 ) I.24822 Answer: Explanation: ) April credit sales #redit collections month of sale #ollections from April credit sales April cash sales #ollections from April credit sales 'otal cash received from April sales

I 104222 ,2H I .4822 I ,04222 I .4822 I .24822

iff: $ L!: "-, E!#: E"-$0 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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102) Boliath #ompan* prepared the following purchases )udget: :onth Kune Kul* August Septem)er !cto)er %udgeted 3urchases I,/4022 I.$4/22 I,"4022 I./4822 I."4.22

All purchases are paid for as follows: ,2H in the month of purchase4 ./H in the following month4 and $/H two months after purchase. >hat are the cash dis)ursements in August for Kune purchases? A) I124082 %) I$24012 #) I1042$2 ) I84"22 Answer: Explanation: ) I ,/4022 F $/H L I 84"22 iff: 1 L!: "-, E!#: E"-$7 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

82 #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

101) Boliath #ompan* prepared the following purchases )udget: :onth Kune Kul* August Septem)er !cto)er %udgeted 3urchases I,/4022 I.$4/22 I,"4022 I./4822 I."4.22

All purchases are paid for as follows: ,2H in the month of purchase4 ./H in the following month4 and $/H two months after purchase. >hat are the cash dis)ursements in !cto)er for Septem)er purchases? A) I$24012 %) I114./2 #) I84"22 ) I1/$4007 Answer: A Explanation: A) I./4822 F ./H L I $24012 iff: 1 L!: "-, E!#: E"-$7 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

81 #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

10$) Boliath #ompan* prepared the following purchases )udget: :onth Kune Kul* August Septem)er !cto)er %udgeted 3urchases I,/4022 I.$4/22 I,"4022 I./4822 I."4.22

All purchases are paid for as follows: ,2H in the month of purchase4 ./H in the following month4 and $/H two months after purchase. >hat are the total cash dis)ursements in August for the purchase of merchandise? A) I./4,,2 %) I,1422/ #) I,"4"2/ ) I114882 Answer: # Explanation: #) August purchases 3a*ment month of purchase is)ursements from August purchases Kul* purchases 3a*ment month after purchase is)ursements from Kul* purchases Kune purchases 3a*ment $ months after purchase is)ursements from Kune purchases is)ursements from August purchases is)ursements from Kul* purchases is)ursements from Kune purchases 'otal August cash dis)ursements I ,"4022 ,2H I 114882 I .$4/22 ./H I 1"41$/ I ,/4022 $/H I 84"22 I 114882 I 1"41$/ I 84"22 I ,"4"2/

iff: $ L!: "-, E!#: E"-$7 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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10,) Boliath #ompan* prepared the following purchases )udget: :onth Kune Kul* August Septem)er !cto)er %udgeted 3urchases I,/4022 I.$4/22 I,"4022 I./4822 I."4.22

All purchases are paid for as follows: ,2H in the month of purchase4 ./H in the following month4 and $/H two months after purchase. >hat are the total cash dis)ursements in !cto)er for the purchase of merchandise? A) I./4,,2 %) I,"4"2/ #) I1.48$2 ) I,/4.,2 Answer: A Explanation: A) Aug. 3urchases I ,"4022 F $/H L I "4"22 Sept. ./4822 F ./H L $24012 !ct. ."4.22 F ,2H L 1.48$2 'otal I ./4,,2 iff: $ L!: "-, E!#: E"-$7 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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10.) Lough #ompan* prepared the following purchases )udget: :onth Kune Kul* August Septem)er !cto)er %udgeted 3urchases I.24222 I.,4222 I,"4022 I.04222 I."4122

All purchases are paid for as follows: $2H two months after purchase4 //H in the following month4 and $/H in the month of purchase. >hat are the cash dis)ursements in August for Kune purchases? A) I84222 %) I$/4,22 #) I$$4222 ) I124222 Answer: A Explanation: A) I .24222 F $2H L I 84222 iff: 1 L!: "-, E!#: E"-$7 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

8. #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

10/) Lough #ompan* prepared the following purchases )udget: :onth Kune Kul* August Septem)er !cto)er %udgeted 3urchases I.24222 I.,4222 I,"4022 I.04222 I."4122

All purchases are paid for as follows: $2H two months after purchase4 //H in the following month4 and $/H in the month of purchase. >hat are the cash dis)ursements in !cto)er for Septem)er purchases? A) I"4$22 %) I$/4,22 #) I84222 ) I18.4222 Answer: % Explanation: %) I .04222 F //H L I $/4,22 iff: 1 L!: "-, E!#: E"-$7 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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100) Lough #ompan* prepared the following purchases )udget: :onth Kune Kul* August Septem)er !cto)er %udgeted 3urchases I.24222 I.,4222 I,"4022 I.04222 I."4122

All purchases are paid for as follows: $2H two months after purchase4 //H in the following month4 and $/H in the month of purchase. >hat are the total cash dis)ursements in August for the purchase of merchandise? A) I.14//2 %) I./4."/ #) I,,4//2 ) I"4"22 Answer: A Explanation: A) August purchases 3a*ment month of purchase is)ursements from August purchases Kul* purchases 3a*ment month after purchase is)ursements from Kul* purchases Kune purchases 3a*ment $ months after purchase is)ursements from Kune purchases is)ursements from August purchases is)ursements from Kul* purchases is)ursements from Kune purchases 'otal August cash dis)ursements I ,"4022 $/H I "4"22 I .,4222 //H I $,40/2 I.24222 $2H I 84222 I "4"22 I $,40/2 I 84222 I .14//2

iff: $ L!: "-, E!#: E"-$7 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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107) Lough #ompan* prepared the following purchases )udget: :onth Kune Kul* August Septem)er !cto)er %udgeted 3urchases I.24222 I.,4222 I,"4022 I.04222 I."4122

All purchases are paid for as follows: $2H two months after purchase4 //H in the following month4 and $/H in the month of purchase. >hat are the total cash dis)ursements in !cto)er for the purchase of merchandise? A) I1$4$7/ %) I,74/7/ #) I.14//2 ) I./4."/ Answer: Explanation: ) Aug. 3urchases I ,"4022 F $2H L I 74"$2 Sept. .04222 F //H L $/4,22 !ct. ."4122 F $/H L 1$4$7/ 'otal I ./4."/ iff: $ L!: "-, E!#: E"-$7 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 108) La(ewood Ket S(is has )udgeted sales for Kune and Kul* at I.$24222 and I.8242224 respectivel*. Sales are 7/H credit4 of which .2H is collected in the month of sale and 02H is collected in the following month. >hat is the accounts receiva)le )alance on Kul* ,1? A) I18"4222 %) I$884222 #) I$104222 ) I,024222 Answer: # Explanation: #) Kul* .824222 F 7/H L ,024222 F 02H L I $104222 iff: 1 L!: "-, E!#: E"-,2 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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10") efine operating )udgets and financial )udgets. List the specific )udgets which are operating )udgets. List the specific )udgets which are financial )udgets. Answer: !perating )udgets: 1. sales )udget $. production )udget ,. direct materials )udget .. direct la)or )udget /. manufacturing overhead )udget 0. operating expenses )udget 7. )udgeted income statement 'he operating )udgets are the )udgets needed to run the dail* operations of the compan*. 'he operating )udgets culminate in a )udgeted income statement. 'he starting point of the operating )udgets is the sales )udget4 )ecause it affects most other components of the master )udget. After estimating sales4 manufacturers prepare the production )udget4 which determines how man* units need to )e produced. !nce production volume is esta)lished4 managers prepare the )udgets determining the amounts of direct materials4 direct la)or4 and manufacturing overhead that will )e needed to meet production. @ext4 managers prepare the operating expenses )udget. After all of these )udgets are prepared4 management will )e a)le to prepare the )udgeted income statement. Financial )udgets: 1. capital expenditures )udget $. cash )udgets ,. )udgeted )alance sheet 'he financial )udgets pro<ect the collection and pa*ment of cash4 as well as forecast the compan*;s )udgeted )alance sheet. 'he capital expenditure )udget shows the compan*;s plan for purchasing propert*4 plant4 and e-uipment. 'he cash )udget pro<ects the cash that will )e availa)le to run the compan*;s operations and determines whether the compan* will have extra funds to invest or whether the compan* will need to )orrow cash. Finall*4 the )udgeted )alance sheet forecasts the compan*;s position at the end of the )udget period. iff: , L!: "-, E!#: S"-$ AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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172) %e*erl* #orporation anticipates the following sales revenue over a five month period:

%*erl* #orporation;s sales are .2H cash and 02H credit. 'he %e*erl* #orporation;s collection histor* indicates that credit sales are collected as follows: :onth of sale :onth after sale 'wo months after sale +ncollecti)le $2H /2H $/H /H

&e-uired: 3repare a cash collections )udget for each month in the -uarter JKanuar*4 Fe)ruar*4 and :arch) and for the -uarter in total. Answer:

iff: , L!: "-, E!#: E"-$7 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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171) 3otatoState :anufacturing is preparing its cash pa*ments )udget for the coming month. 'he following information pertains to the cash pa*ments: a. 3otatoState :anufacturing pa*s for 72H of its direct materials purchases in the month of purchase and the remainder the following month. Last month;s direct material purchases were I.242224 while FirstState :anufacturing anticipates I./4222 of direct material purchases this coming month. ). irect la)or for the upcoming month is )udgeted to )e I$/4222 and will )e paid at the end of the upcoming month. c. !verhead is estimated to )e 1/2H of direct la)or cost each month and is paid in the month in which it is incurred. 'his monthl* estimate includes I84222 of depreciation on the plant and e-uipment. d. :onthl* operating expenses for next month are expected to )e I$74/224 which includes I14/22 of depreciation on office e-uipment and I$4222 of )ad de)t expense. 'hese monthl* operating expenses are paid during the month in which the* are incurred. e. 3otatoState :anufacturing will )e ma(ing an estimated tax pa*ment of I04222 next month. &e-uired: 3repare a cash pa*ments )udget for the month. Answer:

iff: $ L!: "-, E!#: E"-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

"2 #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

17$) 'he Alec #orporation sells inflata)le pools. !n Kune ,24 there were 12/ pools in ending inventor*4 and accounts receiva)le had a )alance of I1$4222. Sales of inflata)le pools Jin units) have )een )udgeted at the following levels for the upcoming months: Accounts receiva)le4 Kune ,2 @um)er of pools )udgeted to )e sold in Kul* @um)er of pools )udgeted to )e sold in August @um)er of pools )udgeted to )e sold in Septem)er @um)er of pools )udgeted to )e sold in !cto)er I1$4222 ,/2 .$2 ,72 ,22

'he compan* has a polic* that the ending inventor* of inflata)le pools should )e e-ual to ,2H of the num)er of pools to )e sold in the following month. 'he !utdoor Leisure Store sells the inflata)le pools for I122 each. 'he compan*;s collection histor* shows that ,2H of the sales in a month are paid for )* customers in the month of sale4 while the remainder is collected in the following month. &e-uired: a. 3repare a merchandise purchases )udget showing how man* pools should )e purchased in each of the months including Kul*4 August4 and Septem)er. ). 3repare a cash collections )udget for each of the months including Kul*4 August4 and Septem)er. Answer: art a! Merchandise urchases Budget Kul* August Septem)er !cto)er %udgeted unit sales ,/2 .$2 ,72 ,22 esired ending inventor* J,2H of next month;s sales) 1$0 111 "2 'otal needs .70 /,1 .02 Less )eginning inventor* 12/ 1$0 111 &e-uired purchases ,71 .2/ ,." A"T b! Cash Collections Budget %udgeted unit sales Selling price per unit %udgeted sales Accounts receiva)le4 Kune ,2 Kul* sales August sales Septem)er sales 'otal cash collections

Kul*

August Septem)er ,/2 .$2 ,72 I122.22 I122.22 I122.22 I,/4222 I.$4222 I,74222 I1$4222 I124/22 I$.4/22 I1$4022 I$"4.22 I114122 I$$4/22 I,74122 I.24/22

iff: , L!: "-, E!#: E"-$8 AA#S%: Anal*tical 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 17,) A merchandising compan* will have a production )udget. Answer: FALSE iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget
"1 #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

17.) 'he master )udget of a service compan* has fewer individual )udget components than does the master )udget of a manufacturing compan*. Answer: '&+E iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 17/) 'he operating )udgets of retailers and manufacturers are virtuall* identical. Answer: FALSE iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 170) :erchandisers use a Ccost of goods sold4 inventor*4 and purchasesC )udget to calculate the amount of merchandise to purchase. Answer: '&+E iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 177) 'he financial )udgets prepared for manufacturers are different than those for merchandising and service companies. Answer: FALSE iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 178) :anufacturing4 merchandising4 and service companies prepare operating expense )udgets. Answer: '&+E iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 17") :erchandising companies do not prepare a direct materials )udget. Answer: '&+E iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget
"$ #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

182) Service companies do not prepare a cash )udget. Answer: FALSE iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 181) >hich of the following t*pes of companies use a direct materials )udget? A) :anufacturing %) :erchandising #) Service ) All of the a)ove Answer: A iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

", #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

18$) >hich of the following t*pes of companies would com)ine cost of goods sold4 inventor*4 and purchases into one )udget? A) :anufacturing %) :erchandising #) Service ) All of the a)ove Answer: % iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 18,) >hich of the following t*pes of companies use a sales )udget? A) :anufacturing %) :erchandising #) Service ) All of the a)ove Answer: iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 18.) >hich of the following t*pes of companies use an operating expense )udget? A) :anufacturing %) :erchandising #) Service ) All of the a)ove Answer: iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

". #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all

18/) >hich of the following t*pes of companies use a Ccost of goods sold4 inventor*4 and purchasesC )udget? A) :erchandising %) :anufacturing #) Service ) All of the a)ove Answer: A iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 180) >hich of the following t*pes of companies use a capital expenditures )udget? A) :anufacturing %) :erchandising #) Service ) All of the a)ove Answer: iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 187) 'he format of the Ccost of goods sold4 inventor*4 and purchasesC )udget is as follows: A) desired ending inventor* E )eginning inventor* - cost of goods sold. %) cost of goods sold E desired ending inventor* - )eginning inventor*. #) cost of goods sold - desired ending inventor* E )eginning inventor*. ) desired ending inventor* - )eginning inventor* - cost of goods sold. Answer: % iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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188) :erchandising companies prepare which of the following )udgets? A) Sales %) #ash #) !perating expense ) All of the a)ove Answer: iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 18") All of the following )udgets are prepared )* service companies except A) cost of goods sold4 inventor* and purchases. %) cash. #) operating expense. ) sales. Answer: A iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1"2) All of the following )udgets are prepared )* merchandising companies except A) sales. %) operating expense. #) direct materials. ) cost of goods sold4 inventor* and purchases. Answer: # iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

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1"1) All of the following )udgets are prepared )* merchandising companies except A) manufacturing overhead. %) capital expenditures. #) )udgeted income statement. ) cash. Answer: A iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1"$) :erchandising companies prepare sales4 cash4 and operating expense )udgets. Answer: '&+E iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1",) Service companies do not prepare a cost of goods sold4 inventor*4 and purchases )udget. Answer: '&+E iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1".) :erchandising companies prepare a direct materials )udget. Answer: FALSE iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget 1"/) :erchandising companies prepare a manufacturing overhead )udget. Answer: FALSE iff: 1 L!: "-/ E!#: E,-,. AA#S%: &eflective 'hin(ing Learning !utcome: iscuss )asic )udgeting concepts and identif* and prepare the )udgets that comprise the master )udget

"7 #op*right 1 $21, 3earson Education4 5nc. pu)lishing as 3rentice 6all