Questions

Question N° 1

The financial budget is that part of the master budget that includes

A) the capital budget and the cash budget.

B) the capital budget and the budgeted balance sheet.
C) the capital budget, the cash budget, and the budgeted statement of cash flows.
D) the cash budget, the budgeted statement of cash flows, and the retained earnings budget.

Question N° 2

Unit sales of Product X are currently 30,000, while unit sales of Product Y are double those of
Product X. What will the company’s sales forecast be, assuming sales of Product X increase by 10
percent and those of Product Y go up by 12,000 units?

A) 33,000 and 72,000 units, respectively

B) 33,000 and 66,000 units, respectively
C) 30,000 and 60,000 units, respectively
D) 105,000 units

Question N° 3

Herman Company manufactures baskets. It expects to sell 30,000 baskets in 19x1. The company
had enough beginning inventory of direct materials to produce 36,000 baskets. Beginning
inventory of finished baskets totaled 3,000 with a target ending inventory of 3,750 baskets. The
baskets sell of $6.00 and the company keeps no work-in-process inventory. Direct materials costs
for each basket total $2.00, while direct labor is $1.00. Factory overhead is $0.40 per basket. What
would be the amount of sales in the budgeted income statement?

A) $162,000
B) $180,000
C) $117,000
D) $119,250
Use the information below to answer the following questions.

Billiard, Inc. manufactures pool cues. It expects to sell 20,000 cues in 19x1. The company had
enough beginning inventory of direct materials to produce 24,000 cues. Beginning inventory of
finished cues totaled 2,000 with a targeted ending inventory of 2,500 cues. The cues sell for
$12.00 and the company keeps no work-in-process inventory. Direct materials costs for each cue
total $2.00, while direct labor is $4.00. Factory overhead is $0.80 per cue.

Question N° 4

What would be the amount of sales in the budgeted income statement?

A) $216,000
B) $240,000
C) $312,000
D) $318,000

Question N° 5

How many cues will be produced in 19x1?

A) 24,000 cues
B) 22,000 cues
C) 20,500 cues
D) 19,500 cues

Question N° 6

What will be the amount of cost of goods sold?

A) $122,400
B) $136,000
C) $139,400
D) $149,600