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FINANCIAL MANAGEMENT

Bachelor of science in accountancy (Cagayan State University)

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Budget
ing

MODULE 8-BUDGETI
NG C.I
tai
dsi
ntheuseofr
esour
cesandempl
oye
esb ys
ett
i
ngab
enc
hma
rkt
hatc
anb
eus
ed
f
ort
hesubs
equen
teval
uat
i
ono fp
erf
or
mance.
THEORIES: D.I
tpr
ovi
desor
gani
zat
i
onali
ndep
endenc
e.
Basi
cConc e
pts
1. Theconce
ptof“manage
mentbye
xcept
ion
”re
fer
stomanag
eme
nt’
sco
nsi
der
at
io
nof 4
. Whi
cho
fthef
oll
owingi
slea
stl
ik
elyareaso
nwh yacomp a
nyprep
are
sit
sbu
dget
?
A.o nl
ythoseit
emstha
tvar
ymat
eri
all
yfr
omexpect
at
io
ns. A.Topr
ovid
eab asi
sforc
ompari
sonofact
ualpe
rf
o r
ma n
ce
B.o nl
yrar
ee vent
s. B.Tocommunica
teth
ec o
mp a
ny’spl
ansth
rough
outtheent
ir
ebusi
nes
sor
gan
iza
ti
on
C.s ampl
ess e
lect
edatr
ando
m. C.Tocont
rol
inco
mea ndexpe
ndit
ur
einap ar
ti
cul
arperi
od.
D.o nl
ysign
ifi
cant
unf
avor
abl
edevi
at
io
ns. D.Tomakesureth
ecomp a
nyexpandsi
tsoper
ati
ons.

8
. Afo
rmalwri
t
tenst
ate
me nto
fma
nag
eme
nt’
spl
ansfort
hefut
ur
e,pac
kagedi
nfi
nan
cia
l 5
. Whi
chof
thefol
l
owingdoesnotcont
r
ibut
etoaneff
ect
iv
eb u
dget
in
g?
t
er
ms,i
sa: A.Topmanagementisi
nvol
vedinbudge
ti
ng.
A.Respo
nsi
bil
i
tyr
eport
. C.Co s
tofpr
odu
cti
onr
epor
t. B.Togiv
ee achma n
a g
eraf r
eehandinthepre
p a
rat
io
no ft
hebu
dge
t,t
hed
atawi
t
hint
he
B.Per
for
mancere
port
. D.Bu d
get. mast
erbudgetar
eflex
ibl
e.
C.Theorga
niz
a t
i
onisdivi
dedi
ntore
sponsi
bi
li
t
yun i
t
s.
2
. Bu
dge
tsar
erel
at
edtowhi
chof
thef
ol
lo
win
gma
nag
ementf
unc
ti
ons
? D.Ther
eiscommu ni
cat
ionofr
esul
ts.
A.Pl
anni
ng C.Contr
ol
B.Per
fo
rmanc
ee v
alu
ati
on D.all
oft
hese 6
. Th
eb udg
etsthatar
eb asedonav e
ryh i
ghlev
elsofper
fo
rmance
,li
kee
xpe
cte
dco
stsu
sin
g
i
deal
sta
ndards,
2
2.Budg
eti
ngs up
port
sthep l
anni
ngproc
essb yencoura
gingalloft
hefol
lo
winga c
ti
vi
ti
es A.a s
sis
tinpl
anningth
eo pe
rat
io
nso ft
hecompany
ex
cept
: B.sti
mulat
ep e
o pl
etoperf
or
mb et
terth
anthe
yo r
di
nari
l
ywo u
ld
A.Re qui
ri
ngal
lorga
niz
ati
ona
luni
t
stoestab
li
shthe
irgoal
sfo
rthecomi
ngper
io
d. C.a r
ehelpf
uli
ne v
a l
uat
in
gtheperf
ormanc
eo fmanag
ers
B.Incre
asi
ngt hemo t
i
vat
ionofma nag
ersa n
de mpl
oyee
sb yp r
ovi
di
nga gr
eed-
upon D.canleadtolowlev
elsofpe
rf
ormance
exp
ecta
ti
ons.
C.Imp r
ovi
ngo v
eral
ldeci
si
onma k
ingbyc ons
ider
ingallvi
ewpoi
nt
s,opt
i
ons,andc o
st 7
. Whi
choft
hefol
lo
win
gs t
ate
me nt
sisi
ncor
rect
?
con
tr
olpro
grams. A.Animposedbudge
tisth
es ameasapart
ici
pat
i
vebudget
.
D.Direct
i
nga n
dc o
ordi
nat
i
ngoper
ati
onsdur
ingt
hep er
io
d. B.Prep
arat
ionoft
hebudgetwoul
dbetheres
ponsi
bi
li
t
yo f
eachr
esponsi
bi
li
t
yuni
t
.
C.Topma n
agement’
ssuppor
tisnec
ess
a r
ytopro
motebudge
tpar
ti
ci
pati
on.
3
. Whi
choft
hefol
l
owin
ga dv
antag
e sd
oesabu
dgetmo
stl
ypr
ovi
de? D.Thetopma n
agementsho
u l
drev
iewandappr
oveeachr
espon
sib
il
it
yuni
t’
sbu
dget
.
A.Coord
ina
ti
onisi
ncrea
sed.
B.Pla
nni
ngisemphasi
zed. 9
. Th
ep r
i
ma ryro
leoft
heb udget
d i
rec
torandth
eb udge
ti
ngdepar
tmenti
sto
C.Commu n
icat
i
oniscont
in
uous. A.Se t
tl
ed i
sput
esa mongo p e
rat
inge x
ecut
ive
sd uri
ngthedevel
opmentoftheann
ual
D.Compari
sonofact
ualv
ersusbu
dget
edda
ta. o
perati
ngpla
n.
B.De ve
lopthea nnu
alp r
ofi
tp l
anb ysel
ecti
ngthea l
t
ern
ati
vestobea d
optedfo
rmthe
2
4.Whi
choft
hefo
ll
owi
ngisNOTa nadv
anta
geofbu
dget
i
ng? s
uggesti
onssubmit
te
db ythevari
ousoper
ati
ngsegment
s.
A.Itf
or
cesmanage
rstopl
an. C.Co mpil
ethebudgetandma nag
et h
eb ud
getproc
ess.
B.Itp
rov
ide
sreso
urcein
for
mati
onth
atcanb
eu s
edt
oimpr
oved
eci
si
onma
kin
g. D.Justi
fyth
eb udg
ettothecorpor
atepl
anni
ngc o
mmi t
t
eeofth
eb o
ardofdi
rec
tor
s.

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Budget
ing

B.z
ero
-ba
sedb
udg
eti
ng D.l
i
neb
udg
eti
ng
1
0.Thepr
imaryvar
iabl
ea ff
ect
ingact
iv
ep a
rt
ic
ipat
i
ona ndcommit
me n
ttothebudge
tan
dth
e
co
ntr
olsy
stemis 4
1.Th
eb ud
geta ppr
oachth
atismor
ere
leva
ntwhenth
ec o
nti
nuan
ceo fanact
i
vit
yoro
per
at
io
n
A.Ma nagementeff
ort
stoachi
evethebudgetr
athe
rthanopt
i
mizeres
ult
s. must
bejust
ifi
edonthebasi
sofi
t
sneedorus
efu
lne
sstoth
eo r
gani
zat
ion
.
B.Th er
igi
dadherencetothebu
d ge
t wi
tho
utrecog
niz
ingcha
ngi
ngc on
dit
i
ons. A.theinc
reme nt
alapp
roach C.thebasel
i
neapproa
ch
C.Topma nagement i
nvol
veme
nt i
nsu p
porto
fthebudget
. B.thezer
o-ba s
edapproa
ch D.b o
thaandba r
etru
e
D.Th eoppor
tu
n i
t
yb udget
inggi
vestori
sk-
tak
erma na
gersf
ordepar
tmentgr
owt
h.
1
1.Thepro
cesso fdeve
lopi
ngb udge
te s
ti
matesb yr
equi
r
ingalll
evel
so fmanag
emen
tto
1
2.Avar
ia
nto ffi
sca
l-
yearbu
dge
ti
ngwh
ere
byat
wel
ve-
monthpro
jec
ti
onsi
nt
oth
efu
tur
eis es
ti
matesales
,p r
oduct
i
o n
,a n
do the
ro pe
rati
ngdat
aa sthoug
ho per
ati
onswer
ebei
ng
mai
nt
ai
neda t
allt
i
mes: i
ni
ti
at
edfort
hefir
stt
i
mei sre
fer
redt
oa s:
A.Forec
asti
ng. C.Cont
inu
ousbudge
ti
ng. A.F o
recast
i
ng. C.Conti
nuou
sb ud
geti
ng.
B.Zero-
basedbudge
ti
ng. D.Cal
endarbu
dget
ing
. B.Zero-
b a
sedbudget
ing. D.Progr
amb ud
geti
ng.

3
5.Themetho
do fb
udget
ingwhi
chad
dsonemont
h’
sb u
dgett
otheendoft
hep
lanwh
ent
he 3
8.Whi
choft
hefol
l
owingi
sac o
nte
mpo
rar
yap
pro
acht
obudg
eti
ng?
cu
rre
ntmonth
’sbud
geti
sdro
ppedf
romt
hepl
anref
er
sto A.inc
rement
alap
proach C.base
li
neappr
oach
A.L on
g-t
ermbudget C.I ncr
ement
alb
u d
get B.zer
o-ba
sedapproa
ch D.bot
haa n
dba r
etr
ue
B.Op er
ati
onsbud
get D.Co nt
i
nuou
sbudget
5
1.Ze
ro-
basebu
dget
ingrequi
resmanager
sto
2
7.Aco
nti
nuousbudge
t A.Just
if
yexpe
ndit
urestha
t a
reinc
reas
esovert
hepr
iorper
i
od’
sbudg
ete
damo
unt
.
A.isabudgett
hati
sre
vise
dmo nt
hl
yorquar
terl
y. B.Just
if
yal
lexpend
it
u r
es,notj
usti
ncr
eas
eso v
erl
ast
y e
ar’
samou
nt.
B.isamed i
umter
mp l
anthatc
onsi
st
sofmorethan2yea
rs’
pro
jec
tio
ns. C.Ma i
nt
ai
nafull
-
yearbudgetin
tact
atal
lt
imes.
C.isappr
opri
at
eonlyf
oruseofanot
-f
or
-pr
ofi
tenti
t
y. D.Ma i
nt
ai
nab udge
twithzeroi
ncr
easesove
rthep
ri
orperi
od.
D.worksbestf
oranen
ti
tytha
tcanr
eli
abl
yfor
e c
astev
ent
sayearormor
ein
tot
hef
ut
ur
e.
1
3.Ze
ro-
base
dbudget
i
n g
:
3
7.“I
ncr
ement
albudg
eti
ng”r
efer
sto A.inv
olv
est
herevi
ewofchang
esma detoanorg
ani
zat
i
on’
so r
ig
inal
budget
.
A.line-
by-
li
neappr
oval
ofexpe
ndi
tur
es B.doesnot
prov
ideasummaryofan
n ua
l p
roj
ect
i
ons
.
B.s et
ti
ngbudge
tal
lowanc
esbase
do npr
iory
earex
pend
it
ur
es C.inv
olv
est
herevi
ewofeachcos
tcompo n
entf
romacost
/b
enefi
tper
spe
cti
ve.
C.r e
quir
i
ngtopmanagementa
ppr
ovalof
incr
eas
esinbu
dget
s D.emphasi
zest
herel
at
ion
shi
po f
eff
ortt
op r
oj
ect
edann
ualre
venues.
D.u si
nginc
rement
alr
evenu
esandcost
sinbudg
eti
ng
1
8.Asy
ste
matiz
e dappro
achknownaszero
-basedbudge
ti
ng:
4
9.Abu d
getplanforann
ualfi
xedc
ost
sth
ata
ri
sesf
ro
mt opma n
agementd
eci
si
onsd
ir
ect
l
y A.Class
ifi
estheb ud
getbythepri
oryear
’sact
iv
it
ya n
de s
ti
mate
stheben e
fi
tsari
si
ngf r
om
r
efl
ect
ingcor
pora
tepol
ic
y. eachactiv
ity
.
A.Flexibl
ebudget
. C.Disc
ret
io
narybudge
t. B.Comme n cewit
heit
hert
hecurr
entl
eve
lofspendi
ngorpr
oj
ect
edwhic
heverislo
wer.
B.St at
icbud
get. D.Progr
amb u
d g
et. C.Prese
n t
sp la
nnedact
ivi
t
iesf
oraperi
odofti
mebutdoesnot
pre
sentafi
r
mc o mmit
ment.
D.Divi
desthea ct
i
vit
i
eso f
indi
vi
dual
respo
n s
ibi
l
it
ycent
ersi
nt
oas er
i
esofp ac
k ag
esthatar
e
3
6.Th
ete
rm“de
cis
ionpac
kag
e”re
lat
est
o pri
ori
t
ized.
A.comp
rehen
siveb
udget
i
ng C.p
rog
ramb
udg
eti
ng

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Budget
ing

2
0.Whi
choft
hefol
lo
wingst
at
emen t
saboutZ
ero-
basedb udget
in
gisi
nco
rr
ect
? 2
6.Ase
ri
esofbud
getsfo
rva
ryi
ngl
eve
lso
fac
ti
vi
tyi
sa:
A.All
act
ivi
t
iesi
nthecompanyareor
gani
zedi
ntob r
e ak
-upuni
t
scal
l
edpack
age
s. A.Vari
abl
ecostbu
dget
. C.Ma s
terb
ud g
et.
B.All
cost
shavetobejus
ti
fi
edever
ybudget
in
gp eri
o d
. B.Fle
xib
lebudg
et. D.Zero-
basedbudge
t.
C.Theproc
essisn o
tti
mec ons
umingsi
ncejust
ifi
cat
ionofcos
tsca
nbedoneasar
out
i
ne
matt
er
. 4
8.I
faco
mp an
ywishestoe
sta
bli
shaf
act
or
yo v
erhe
adbudgetsy
steminwhic
hes
ti
mat
edc
ost
s
D.Zer
o-bas
edb ud
g e
ti
ngi
ncl
u d
esvari
abl
ecost
so nl
y . ca
nbederi
veddi
rect
l
yfr
ome s
ti
mat
esofa
cti
vi
tyl
eve
ls,i
tsho
uldpre
parea
A.fl
exi
bl
eb ud
get. C.Di s
cret
i
onarybudget
.
3
4.Bu
dget
i
ngexpen
dit
ur
esbyp
urp
osei
sca
ll
ed B.Prog
ramb udg
et. D.Ma nuf
actur
i
n gbudg
et.
A.prog
rambudge
ti
ng C.zero
-ba
sedbud
get
in
g
B.li
nebudg
eti
ng D.fl
exi
bl
ebudg
eti
ng 4
6.Th
eb a
sicdi
ff
ere
nc ebet
we e
nama sterbudgetandafl
exi
b l
ebudgeti
sthat
a
A.Flexi
bl
ebu d
ge tco
nsid
ersonl
yvariabl
ec os
tsbutama st
erbudge
tconsi
der
sall
cost
s.
2
8.Ast
at
icbud
geti
sn ota
ppro
pri
atei
neva
luat
i
ngama n
ager
'seff
ect
i
ven
essi
fac
omp
anyh
as B.Flexi
bl
ebu dg
e tal
lo
wsma nageme n
tlati
tu
deinme et
inggoal
swh er
easama s
terbud
get
A.subst
ant
ia
lfi
xedcost
s. i
sbasedonafixedsta
ndard
.
B.subst
ant
ia
lvari
abl
ecost
s. C.Ma st
erbudgetisforanenti
reproduct
ionfaci
l
it
yb utafle
xib
lebudgeti
sappl
ica
bleto
C.plan
nedact
iv
ityl
evel
stha
tmatc
hactu
alac
ti
vi
tyl
eve
ls. s
ingl
edepar
tme nt
only
.
D.novari
abl
ecosts
. D.Ma st
erbudgetisbase
do nonesp ec
ifi
clev
elofpro
du c
ti
onandaflexi
bl
ebudgetc
anb e
p
repar
edforanyprodu
cti
onl
evelwit
hinarele
vantr
ange
4
5.Fl
exi
bl
ebudget
ingisarepor
ti
n gsys
temwh e
rei
nthe
A.Bu d
getsta
ndardsmayb ea d
jus
tedatmanagement
’sdi
scr
et
ion
. 4
7.Whi
cho
f t
hefo
ll
owingisadi
ff
erencebetweenast
a t
i
cbu dg
etandafle
xibl
ebudgets
?
B.Plannedl
evelofact
ivi
t
yisa dj
ust
edtotheact
uall
evelof
act
iv
it
ybef
oret
hep
erf
or
man
ce A.Afl
exi
blebud
g eti
ncl
ude
so nl
yv ar
iabl
ecost
s;asta
ticbud
getin
clud
eso n
lyfi
xedco
sts
.
r
epor
tispr
epared. B.Afl
exi
blebud
g eti
ncl
ude
sa ll
co s
ts,
as t
ati
cbudget
incl
udesonl
yfi
xedcost
s.
C.Re po
rt
ingdate
sv ar
yaccordi
ngtothema n
ageri
all
eve
lsoft
heuse
rs. C.Afl
exi
blebudgetgi
vesdi
ff
erental
lo
wa n
cesfordi
ff
eren
tlev
elsofact
i
vit
y,ast
a t
i
cbudget
D.Pa c
kagesofacti
vi
ti
esvaryfr
omp er
i
o dt
op er
i
od. doe
sn ot
.
D.Ther
eisnodiff
ere
ncebet
we enthetwo.
1
5.Abud
getthatpr
esent
sthepl
anforarangeo
fac
ti
vi
tys
oth
att
hep
lanc
anb
ead
jus
tedf
or
ch
ang
esinac t
i
vit
yle
vel
sisr
ef
err
edt oa
s: 1
7.Asys
temthatcl
ass
ifi
esb u
dge
treque
stsbyac
ti
vi
tya
nde
sti
mat
est
heb
ene
fi
tsa
ri
si
ngf
ro
m
A.Zero-
basedbudget
i
ng. ea
chact
ivi
ty
:
B.Conti
nuousbudget
i
ng. A.Incr
ementa
lbudge t
i
ngsys
tem.
C.Fle
xibl
eb u
dgeti
ng. B.Stat
icbudge
ti
ngsy st
em.
D.Progr
amp lan
nin
ga n
dbudge
ti
n gsy
ste
m. C.Progra
mp l
anni
nga ndbudg
e t
i
ngsyst
em.
D.Part
ici
pat
iv
esystem.
1
6.Afl
exi
bl
ebudge
tis
A.o net
hatc
anbec ha
ngedwheneve
ramanage
rsodesi
res 2
1.Abu
dge
ttha
tid
en t
i
fi
esre
ven
uesa
ndc
ost
swi
t
hani
ndi
vi
dua
lcon
tr
oll
i
ngt
hei
ri
ncu
rr
enc
eis
B.a dj
ust
edt
orefl
ect
expe
ctedcos
tsatt
heac
tua
lle
velof
act
ivi
t
y A.Mast
erbud
ge t C.Pr
oduct
budge
t
C.o net
hatu
sesthefo
rmul
atot
alcos
ts=co
stperu
nit
xunit
sprod
uce
d B.Res
ponsi
bi
li
tybudg
et D.Noneoft
heabo
ve
D.t h
esameasac on
ti
nuo
u sbu
dget
2
5.Th
edi
ff
ere
nceb
etwe
ena
nin
div
idu
al'
ssu
bmi
t
tedb
udg
etp
roj
ect
i
ona
ndh
iso
rhe
rbe
st

435

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Budget
ing

es
ti
mat
eofth
eite
mb eingproj
ect
edisanexa
mpleof D.No
neo
fth
eab
ove
A.paddi
ngth
eb ud
ge t
B.adher
i
ngtozero-
ba s
edb u
dgeti
ngass
umpti
ons 4
4.Aco
mmo nst
art
ingpoin
tint
heb
udg
eti
ngp
roc
essi
s
C.cre
ati
ngbudget
aryslac
k A.exp
ectedfut
ureneti
nco
me. C.tomoti
vat
eth
esale
sfor
ce.
D.bei
nginc
ongru
ent wi
thpart
ic
ipa
ti
vebudg
eti
ng B.pas
tp e
rfo
rman c
e. D.ac l
eansl
at
e,wi
t
hn oe
xpect
at
io
ns.

4
3.Bu
dge
tsl
ackisacondi
ti
oninwhi
ch 5
7.Whi
choneofthef
oll
owi
ngisanext
ern
alf
act
ort
hat
wou
ldn
eedt
obec
ons
ide
redi
nfo
rmi
nga
n
A.Demandisl
owa tv
ari
ousti
mesoft
heyear i
ni
ti
alb
udgetpr
oposa
l?
B.Exce
ssma c
hinecapac
it
yexi
st
sinsomearea
so f
thepl
ant A.changesi
np r
oduct
desi
gn
C.Ther
eisanint
ent
ion
alover
est
i
mateofexp
ensesoranun
dere
sti
mat
eof
rev
enu
es B.int
rod
ucti
onofanewproduc
t
D.Manager
sgrantf
avor
edemplo
yeesext
rat
ime-
off C.competi
to
rs'a
cti
ons
D.a d
opt
ionofanewma n
u f
act
ur
in
gp r
oce
ss
3
9.Thepr
ocedur
eforset
ti
ngprofi
tob
jec
ti
vesi
nwhic
hthedet
ermin
ati
onofpr
ofi
tobj
ect
i
vesis
su
bordi
nat
edtoth
ep l
ann
ing
,a ndt
heobj
ect
i
vesemer
geastheprodu
ctof
thepla
nni
ngit
sel
f 1
4.Ope
rat
i
ngb u
dget
sa r
e
i
sthe A.afore
casto
fexpect
edope
rat
in
gexpenses
.
A.ap ri
or
imethod C.pra
cti
cal
me t
hod B.afore
casto
foperat
i
ngexpe
nsesandre
lat
edrev
enue
s.
B.theor
eti
calmet
hod D.apost
eri
ori
me t
hod C.afore
casto
funit
sofpr
oduc
ti
on.
D.concer
nedwit
hthei
ncome-
gener
at
ingact
i
vit
i
esofafi
r
m.
4
0.Thepro
cedureforse
tt
in
gp r
ofi
to b
jec
ti
vesi
nwhi
chmanagementspe
cifi
esagiv
e nrat
eof
re
tur
nthati
tseek
storea
li
zei
nth el
ongrunb
ymeansofp
lann
ingt
owardthat
endisth
e 5
4.Whati
sthepro
perpr
epar
at
ionse
quenc
ingo
fthef
ol
lo
win
gbud
get
s?
A.ap ri
or
ime t
hod C.prag
ma t
i
cme t
hod 1. Budg
e t
edBal
anc
eSh ee
t
B.theore
ti
calmeth
od D.adhocme t
hod 2. Sal
esBudget
3. Sel
l
ingandAdmi
nis
tr
ati
veBudg
et
5
0.Bu
dge
ti
ngpr
oces
sinwhi
chi
nf
or
mat
i
onfl
owst
opd
ownandb
ott
omupisr
ef
er
redt
oas
: 4. Budg
e t
edIn
comeStat
ement
A.Cont
i
nuousb
udget
in
g. C.Per
pet
ual
budge
ti
ng A.1 ,
2,3,4 C.2,3,4
,1
B.Par
ti
ci
pat
i
vebudg
eti
ng D.Joi
ntb
udge
ti
ng B 2 ,
3,1,4 D.2,4,1
,3

4
2.Whi
choft
hefol
lo
wingisnot
ap o
tent
i
alpr
oble
mwithpar
ti
ci
pat
i
veb
udg
eti
ng? 2
9.I
nest
imat
in
gt hesal
esvol
umeforamast
erb
udg
et,wh
icho
fth
efo
ll
owi
ngt
ech
niq
uesma
y
A.set
ti
ngst
a nd
ardstha
tar
ee i
t
herto
ohighort
oolo
w beu
sedtoi
mp ro
vethepro
jec
ti
ons
?
B.paddi
ngthebudget A.Brai
nst
orming.
C.bui
ldsl
ackint
othebudge
t B.Stat
i
sti
calanal
ysi
s.
D.all
oft
hea bov
ea r
epote
nti
alpr
obl
ems C.Esti
mati
ngfro
mp re
vio
ussal
esvo
lume
.
D.Allo
fthesear
eu s
eful
.
3
3.Th
eid
ealfi
nanc
ial
pla
nnin
gp r
oce
sswoul
dbe
A.to
p-d
o wnpl
anni
ng. 3
0.Usi
ngt
heconce
ptof‘
exp
ect
edval
ue”i
nsal
esf
or
eca
sti
ngme
anst
hat
thes
ale
sfo
rec
astt
obe
B.bot
to
m- uppl
anni
ng. us
edis
C.acomb i
nat
i
onoftop
-downandb
ott
om-u
ppl
ann
ing
. A.d e
vel
ope
du s
ingt
hei
ndi
cat
ormeth
od

436

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Budget
ing

B.t
hes
umof
thesal
esex
pect
edbyi
ndi
vi
dua
lmanage
rs
C.b
ase
done
xpect
edsel
l
ingp
ri
ceso
fth
eprodu
cts 1
9.Whi
choft
hefol
lowi
ngs t
at
emen t
sisTr
ue?
D.b
ase
donp
roba
bil
i
ti
es A.Underzero-
basedb ud
get
ing,ama n
agerisre
quir
edtost
artatzer
ob ud
getlev
elseac
h
per
iod,asi
ftheprogr
amsinvol
vedwer
ebeingi
nit
i
atedf
ort
hefi
rst
ti
me .
3
1.Se
vera
lsalesfor
ecas
tsareava
il
abl
efro
md i
ff
ere
ntsour
cesandthema
nag
ersh
aveg
ood B.Thepri
ma r
yp ur
p o
seofthecashbud
geti
stoshowtheexp
ectedcashbal
anceattheen
d
i
deasabo
utthei
rl
ik
eli
hoo
ds.Thi
ssi
tua
ti
onca
llf
ort
heuseof oft
heb udgetp
e r
iod
.
A.theexpect
edval
ueconce
pt C.i nd
ica
tormet
hods C.Budgetdat
aa regener
all
yprepar
edbytopmanagementa
ndd i
st
ri
buteddownwar
di nan
B.h i
st
ori
cala
naly
si
s D.as catt
erdi
agr
am org
aniza
tio
n.
D.Theb udgetc ommit
teeisr es
pons
ibl
efo rpr
epari
ngdet
a i
l
edb udgetfi
gure
si na n
5
3.Ano
verl
yo pti
mist
i
csalesbudge
tma yr
esu
lti
n org
aniza
tio
n.
A.inc
rea se
sinsell
i
ngp r
i
ceslat
einth
eyear
.
B.ins
uffic
ient
inve
ntor
i
e s
. 2
3.Whi
choft
hefol
l
owingi
sav al
idst
atement?
C.inc
rea se
ds al
esdur
ingth
ey ea
r. A.Respons
ibi
l
it
yb ud
getid
en t
i
fi
esrevenueandcos
tswi
ththei
ndi
vi
dual
resp
onsi
bl
efort
hei
r
D.excessivei
nvent
ori
es. inc
urr
ence.
B.Thebestwaytoest
abli
shbudgetfi
gur
esistous
elasty
ear’
sact
ual
costandac
ti
vi
tyd
ata
5
6.Whi
choft
hefol
l
owin
gbudget
spr
ovi
dest
hed
ataf
ort
hepre
par
at
ionoft
hed
ir
ectl
abo
rco
st asthi
syear
’sbudget
esti
mates.
bu
dget
? C.As al
esbud
g e
tandas a
lesfor
ecastar
ethesameth
ing.
A.Dir
ect
mater
ial
spur
cha
sebud
get
. C.Sa l
esbud
get
. D.Thepri
marypurpos
eo ft
heca s
hb u
d get
ist
oshowtheexpe
cte
dcashbal
anceatt
heend
B.Cashbud
get. D.Pr o
duc
ti
onbud
get. ofth
eb u
dgetper
iod.

5
5.Th
ein
c r
ease
du seo fa
utomat
ionandlessu
seo f
thewo
rkf
or
cei
nco
mpa
nie
sha
sca
use
da PROBLEMS:
t
re
ndt
o war
dsanin c
reas
ein Costest
imati
onf ormula
1
A.bothva
ri
ablea n
dfix
edc o
sts. . Manageme nthasprep
aredag r
aphshowi
ngthetot
alcos
tsofoper
a t
i
ngb r
anchwar
ehous
es
B.fi
xedcost
san dadecrea
seinvari
abl
ecost
s. th
roughoutthecount
ry.Thec o
stl
inecr
ossesthever
ti
calax
isatP400,00
0.Th et
ot
alcost
C.vari
abl
ecostsandad ec
reasei
nfi
x e
dcost
s. ofope r
at
ingo neb ranc
hi sP6 5
0,00
0 . Thet o
talcostofo p
e r
at
ingtenb r
anc
hesis
D.vari
abl
ecostsandnoc h
angeinfi
xedcost
s. P2,9
00 ,
000.F orpurpos
eso fpr
epar
in
gaflexib
lebudgetbasedonthen umbe
rofbra
nch
warehous
e sino per
at
ion,whatfor
mulawo u
ldb eusedtod et
ermin
eb udget
edcost
sa t
3
2.I
npre
pari
ngacashbu
dge
t,wh
icho
fth
efo
ll
owin
gisn
ormal
lyt
hest
art
i
ngpo
int
forp
roj
ect
i
ng var
iousl
evelsofact
ivi
t
y?
ca
shreq
uir
ement
s? A. Y=P4 00
,000+P2 50
,000X C.Y=P6 50,000+P4 00
,000X
A.Fixe
da s
set
s. C.Accoun
tsre
cei
vab
le. B. Y=P4 00
,000+P2 90
,000X D.Y=P6 50,000+P2 50
,000X
B.Sales
. D.Inv
ent
ori
es.
Sal
esbudget
5
2.Re
cogn
it
io
no f
thema n
yunce
rt
aint
i
esi
nbudge
ti
ngise
xempl
i
fi
edbyc
ompa
nie
sno
rma
ll
y Pur
chasesbudget–merchandisi
ngconce
rn
2
A.fo
reca
sti
ngsal
es . PT OComp an
yd e
sir
esane ndi
nginv
ent
oryofP140,00
0.Itexp
ect
ssal
esofP8
00,
000and
B.est
abl
is
hin
gmi ni
mumrequi
r
edcas
hbal
ances ha
sab egi
nni
nginv
entor
yo fP130
,00
0.Co s
to fs
ale
sis65%ofsal
es.Bud
get
edpu
rcha
ses
C.fo
reca
sti
ngonl
yfix
edcos
ts ar
e
D.omit
ti
ngexpec
teddi
vi
den
dp ay
ment
sfr
ombudget
eddi
sbu
rse
ment
s A.P 5 30,
000 C.P 8 10,
000

437

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Budget
ing

B.P 7
90,
000 D.P1
,07
0,0
00
7
.Lor
ieCompanypla
nstos e
ll400,
000un i
t
so ffi
nis
h e
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oduc
tinJul
yanant
ici
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h
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. Cal
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oj
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ch.Cal
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e50%o fn
extmo n
th’
ssal
esneedsonhan
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he pr
oducti
s80%o ft
hen ex
tmo nth
’sest
i
ma tedsales.
en
do famo n
th.IfCal
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era
gegros
sprofi
tof40%,whatar
etheFebr
uary28 Ther
ea r
e3 00
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shedun i
t
sintheinvent
oryo nJune30.Eachuni
toffi
nis
he dproduct
pu
rchas
es? re
quir
esfourpou
ndso fdi
rectmater
ia
lsa tac ostofP2.
50perpound
.Th ereare8 00,
0 00
A.P4 65,
000 C.P7 7
5,000 pound
so fdi
re
ctmate
ri
a l
sintheinv
ent
o r
yo nJune3 0.
B.P3 10,
000 D.P4 2
8,000 Howma nyuni
tssho
uldbep r
oducedfort
het h
ree-monthper
io
dendi
ngSeptember3 0?
A.1 ,
260,000 C.1 ,
331,
440
4
. Bl
ueCompanybud
get
edpur
cha
seso
fP10
0,00
0.Costof
sal
eswa
sP1
20,
000a
ndt
hed
esi
r
ed B.1 ,
328,000 D.1 ,
424,
050
en
din
ginve
ntor
ywasP42
,00
0.Theb
egi
nni
ngin
ven
tor
ywas
A.P2 0
,000 C.P4 2,
000 Endi
nginventorybudget
8
B.P3 2
,000 D.P6 2,
000 .I fth
er e
q u
ireddi
rectmat
er
ia
lspur
chas
esa r
e8,000po
undsandthedi
rec
tmat
eri
alsr
equ
ir
ed
f
orproducti
onist h
reeti
mest hedi
rectmater
i
alspur
cha
ses,a n
dt hebegi
nni
ngdir
ect
5
. Thepaymentsche
duleofpurcha
sesmadeona ccoun
tis:60%inthetimep er
i
odo f mat
eri
alsa r
ethreeandah al
fti
mesthedi
rectmat
eri
al
spurch
ases,whata
rethedes
ir
ed
pur
cha
se,30%inthefol
l
owingti
meper
iod
,and10%i nthesub
sequ
entt
imep er
i
od.Tot
al en
dingdir
e c
tma t
er
iali
npou
nds?
cr
edi
tpurc
haseswereP200
,000inMay
,andP1 0
0,00
0inJ u
ne.Tot
alpa
yme n
tsoncred
it A.2 0,
000 C.1 2,
000
pur
cha
seswereP140,
000i
nJ un
e.What
we r
eth
ec r
edi
tpur
chase
sint
hemo n
thofApr
il
? B. 4 ,
000 D.3 2,
000
A.P2 00
,000 C.P1 45,
000
B.P1 00
,000 D.P2 15,
000 Rawma ter
ial
susagebudge t
9
. Mi ner
vaCo mpanysel
lsasin
glepr
oduc
t.Budget
edsal
e sfo
rth
ey e
a rar
ea n
ti
ci
pate
dtob e
Pr
oduc
ti
onbudge
t 640,
000u ni
ts
.Th eesti
mate
db e
gin
nin
ga n
de ndi
ngfi
nish
edgoodsinven
tor
ya r
e1 08
,00
0
6
. Montalban Company’s sales budget shows the following expected sales for and90,00
0,resp
ecti
vel
y.Ap r
odu
cti
onofo
neu n
itr
equi
resthef
ol
lo
wingma t
eri
al
s:
the following year: Mat
eri
alLL 0
.50lb
.@ P0.60
Quart
er Uni
ts Mat
eri
alMM 1
.00lb
.@ P1.70
Fir
st 1
2 0,
000 Mat
eri
alNN 1
.20lb
.@ P1.00
Second 1
6 0,
000 Wh a
taretheres
p e
cti
vepesoamount
sofeachmate
ri
altobeusedinprodu
cti
onduri
ngthe
Thi
rd 90,0
00 year
?
F
ourt
h 1
1 0,
000 Ma t
eri
alLL Mat
eri
alMM Ma t
er
ialNN
Tot
al 4
8 0,
000 A. P181,
200 P1,026
,800 P724,
800
Theinvent
oryatDec
ember31ofth
epri
ory
earwa
sb u
dgete
dat3 6
,000uni
ts
.Th eq
uanti
t
y B. P181,
200 P1,026
,800 P746,
400
offi
nis
hedgo o
dsinv
ent
oryatt
heendofea
chquar
te
ristoequ
al 3
0%o fth
en ex
tquar
te
r’
s C. P186,
600 P1,057
,400 P746,
400
budget
eds a
lesofu
nit
s. D. P186,
600 P1,057
,400 P724,
800
Howmu chshoul
dtheproduc
ti
onbud
getshowf
orunit
stobep roduc
edd ur
i
ngthefi
rst
quar
ter? Rawmater
ial
spurchasesbudget
1
0
A. 4 8
,000 C.132,
000 .Ifth
erewere30 ,
000poundsofr
awma t
er
ia
lonh
andonJ
anu
ary1,60,
000p
ound
sare
B. 9 6
,000 D.144,
000 d
esi
redforin
ve n
tor
ya tDe c
ember3
1,a n
d180
,00
0pou
ndsarere
quir
edfo
rannu
al

438

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Budget
ing

pr
odu
cti
on,
howmanyp
oun
dso
fra
wma
ter
i
alsh
oul
dbepur
cha
seddu
ri
ngt
hey
ear
? B.1
,80
0po
und
s D.2
,70
0po
und
s
A.150,
000pou
nds C.120,
000pou
nds
1
4
B.240,
000pou
nds D.210,
000pou
nds .Sa
lesComp a
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tin
gs al
esof300,000uni
t
so fit
sonl
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uctfo
rthec
omi
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r.
Pr
oduct
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ono foneu n
itofpro
ductr
e q
u i
r
e sthr
eepou nd
so fMat
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1
. Si
lv
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nvent
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ods Mat
eri
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vento
ryuni
t
sa tt
hebegi
nningofthey
earare:
at7
5%thecomingmonth
’sb
udgetedsal
es.I
tal
sokee
psit
sinvent
or
yofrawma t
e r
i
alsat50% Act
ual
, J
a n.
1 Bu
dget
ed,Dec31
oft
hecomingmo n
th’
sbudge
tedp r
oduc
ti
on.Ea c
hu ni
tofprodu
ctreq
uir
estwop ou
ndso f Fi
nis
hedg ood
s 60,000 50,0
00
mat
eri
al
s.Thep r
oduct
i
onbudgetis
,inuni
ts
:Ma y,1,
000;Jun
e,1,2
00;Jul
y,1,300;aug
ust, Mater
i
a l
Q 80,000 60,0
00
1,
600.Rawmater
ial
purc
has
esinJulywoul
dbe Mater
i
a l
L 88,000 96,0
00
A.1 ,
525poun
ds C.2 ,5
50po u
nds Howmanyp ou
ndsofMat
e r
i
alQisSalesplanni
ngt
obu ydur
i
n gt
hecomi
ngyear
?
B.2 ,
900poun
ds D.3 ,0
50po u
nds A.8 5
0,000 C.8 62,
0 0
0
1
2
B.8 9
0,000 D.9 08,
0 0
0
. Eac
hu ni
to ffi
nis
hedprodu
ctuses6kil
ogr
amsofrawmater
i
als
.Th epr
odu
cti
onandin
vent
or
y
bu
dgetsforMa y2007areasf
oll
ows: 1
5
.St
ramaCo mpanyprepar
esit
sbudge
tsona nnua
l bas
is.Thef
oll
owingbegi
nni
ngan dendi
ng
Begi
nn i
ngI nv
ent
ory: i
nvent
or
yu ni
tl
evelsarepl
annedf
ort
hefis
c a
lyearofJune1,2006thr
oughMay3 1
, 20
07.
Fi
nishedg ood
s 15,
000uni
ts June1,2006 May31,2007
Rawma ter
i
als 21,
000kg.
Rawma t
eri
al* 40,
000 50
,000
Budgetedu ni
tsal
es 18,
000uni
ts
Work-
in-
pro
ce ss 10,
000 10
,000
Pla
nne den di
ngin
vent
ory
Fi
nis
hedg oods 80,
000 50
,000
Fi
nishedg ood
s 11,
400uni
ts
*T
wo(2)unit
sofrawma t
eri
alar
eneededtoproduceeachuni
toffi
nis
hedprod
uct.
Rawma ter
i
als 24,
400kg.
I
f5 0
0,00
0finis
he dunit
swe r
etob ema nuf
actur
edd uri
ngthe2 006-
2007fi
scalyearby
Dur
ingth
ep rod u
cti
onproc
ess,
iti
su s
ual
lyf
oundt
hat10%o f
produ
cti
onun
it
sarescr
appe
das
St
ramaCo mpany,theuni
tsofr
awma t
eri
alneededtobepurc
hasedwo ul
dbe
de
fect
iv
ea ndth i
slos
soccur
saft
erthera
wma t
eri
al
shavebeenpl
acedi
nproc
ess.
A.1 ,
000,
0 0
0u ni
ts C.1 ,020,
000uni
ts
Howma nykil
og r
amso f
rawmateri
al
sshoul
dbepurc
hasedi
nJ u
ne?
B.1 ,
010,
0 0
0u nit
s D. 9 90,
000uni
ts
A.8 9,
800 C.9 6
,000
B.9 8,
440 D.9 9
,400 1
6
. Diliman Corporation includes the following quarterly budget for production:
1
3
. Vi
ol
etCompanyma nuf
act
ur
esas i
ngl
ep r
oduc
t.Itkeepsit
sinve
nto
ryoffi
nis
hedgoodsat Quart
er Pro
ducti
on
t
wic
ethecomingmonth’
sbudget
edsal
es,i
nve
ntor
yofrawma t
eri
al
sat150%o ft
hecomin
g Fi
rst 60,00
0u ni
t
s
mont
h’
sb udge
tedprodu
cti
onrequ
ir
ements
. Eachunitofpro
ductr
equ
ire
st wopoundsof Secon
d 45,00
0u ni
t
s
mat
eri
al
s.Theprodu
cti
onbudge
tsi
nuni
tscons
ist
ofth
ef o
ll
owi
ng:. Thi
rd 40,00
0u ni
t
s
May 1
,00
0 Fourt
h 65,00
0u ni
t
s
Ju
ne 1
,20
0 Eachunitofpr
odu
ctrequi
r
es2 .
5ki
log
ramsofdi
rec
tmate
ri
al
s .Thecompanybegi
nse
ach
Ju
ly 1
,30
0 quar
terwit
hinv
ent
oryofdir
ectmat
er
ial
sequalt
o25perc
entofthetot
alq
uart
er
’smat
er
ia
l
Augu
st 1,
600 re
quir
eme nt
s.
Rawmater
ia
lpurc
hasesi
nJunewoul
dbe Whatist
h ebud
get
edp u
rchas
esofmat
eri
al
sfort
hesec
ondquart
er?
A.2 ,
600pounds C.2 ,
400p ou
nds A.1 13,
7 50 C. 4 6,
250

439

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 lOMoARcPSD|37346555

Budget
ing

B.1
09,
375 D.1
12,
500 B.P6
91,
000 D.P9
87,
000

2
1
I
ndi
rec
tlaborcosts .AdelComp a
n yhasthefol
lo
wingsal
esfor
ecas
tsfort
hesele
cte
dth
ree-
monthper
iodi
n2007:
1
7
.Namu co
,Inc.usesflexi
bl
eb udgeti
ngforc os
tc o
ntr
o l
. Duri
ngthemo nthofSepte
mb er
, Month Sal
es
Namu co
,Inc.prod
uced1 4,
500u nit
soffi
nish
edg oodswit
hindi
re
ctlaborcos
tsofP25,
375. Apri
l P12,
000
It
sannualma s
terbudgetr
efl
ectsanindi
rectl
aborcost
s,avari
abl
ec o
st,ofP360
,000based May 7,
000
onana nnualp
roduct
ionof200,00
0u nit
s.Inthepr
epa r
at
ionofpe
rfor
ma nc
eanalys
isf
orthe June 8,
000
mo n
thofSeptember,
ho wmuc hfl
exi
blebudgetsho
uldbea l
l
owedfori
ndir
ectl
aborcos
ts? Sev
en t
yp ercentofsalesarecoll
ect
edinthemo nthofthesal
e,andtheremai
nderi
s
A.P3 0,
000 C.P2 5,375 co
ll
ecte
di nthefol
lo
wingmo nt
h.
B.P2 9,
167 D.P2 6,100 Accountsrecei
vabl
eb al
anc
e(Apri
l1,20
07 ) P10,
000
Cashb al
a nc
e(Ap r
il
1,2007) 5,
000
Cashrec
eiptsbudget Mi
nimumc a
s hbalan
c eisP5,0
00.Ca shcanb eborr
owedinP1,
000in
crement
sfromth
e
Sal
es l
ocalbank(assumen oint
er
estchar
ges)
.
1
8
.Ge ner
ousCo mpanybeganit
so p
erati
onsonJanu
ary1o fthecur
ren
tyear
.Bu dget
edsal
es Howmu chca shwoul
db ecoll
ect
edinJunef
roms al
es?
f
orthefirs
tq ua
rt
era r
eP2 40,0
00 ,P300,
000,andP4 20,00
0,respe
cti
vel
y,forJan
uary, A.P 7 ,700 C.P 8 ,0
00
Febr
uaryandMa r
ch.Ge ner
ousCo mpanyexp
ect
s20%o fi
tssal
escashandtherema
inde
r B.P 8 ,500 D.P1 0,
000
onaccount
.Of t
hesal
eso naccount
,70%a r
eexpec
tedtob ecol
l
ect
edinthemonthofs
ale
,
25%inthemo n
thfol
l
owingthesal
e,andther
emain
derinthefol
lo
wingmont
h . 2
2
.TheAve
li
naCo mpanyhasthefol
l
owinghist
or
ical
patt
ernonit
scr
edi
tsal
es.
Howmu chshoul
dGe ne
rousrec
eivefr
oms al
esi
nMa r
ch? 70 perce
n t
coll
ecte
dinmo nt
ho fsa
le
A.P3 04,8
00 C.P3 88,
80 0 15 perce
n t
coll
ecte
dinthefi
rstmont
ha f
te
rsale
B.2 94,
000 D.P2 95,
20 0 10 perce
n t
coll
ecte
dinthesecondmo n
thaft
ersal
e
4 perce
n t
coll
ecte
dinthethi
rdmo n
thaft
ersal
e
Cre
dit
sale
s 2 perce
n t
u n
coll
ect
ibl
e
1
9
.Me ndr
ezCompanyhasacol
l
ect
ionsched
uleof60%d ur
ingth
emo n
thofsal
es,15
%t h
e Thesal
esono penaccounthav
eb eenbudget
edforthel
astsi
xmont
h sof2
007ar
eshown
f
oll
owi
ngmo nt
h,and15%subs
equent
ly
.Th eto
talcr
edi
ts a
lesint
hecurr
entmonthof be
low:
Sept
emberwer
eP8 0
,00
0an
dtota
l c
oll
ect
i
onsinSepte
mb e
rwe r
eP57,
000
.Wh atwer
eth
e Jul
y P6 0
,00
0
cr
edi
tsal
esi
nJuly
? August 70
,00
0
A.P9 0,
000 C.P4 5
,000 Sept
emb e
r 80
,00
0
B.P3 0,
000 D.P3 2
,000 Octo
ber 90
,00
0
November 100
,00
0
Ca
shc ol
l
ecti
ons December 85
,00
0
2
0
.Ob li
gac
ionComp a
nyh a
sP2 99
,00
0ina ccou
ntsre
cei
vabl
eonJanu
ary1,200
6.Budge
ted Theest
i
ma t
edtot
a lc
ashc ol
l
ect
ionsduri
ngthefour
thcal
endarq
uar
terfr
omsal
esmadeon
sal
esfo
rJ a
nuaryar
eP8 6
0,0
00.Ob l
i
gacio
ne xp
ect
stosel
l20%o
fit
smerch
andis
efo
rca
sh. op
e na
ccountdur
ingthefour
thcal
endarquar
te
rwo ul
dbe
Oftheremain
ingsal
es,75%a r
ee x
pe c
tedtobec o
ll
ect
edint
hemo n
thofsalea
ndthe A.P1 72,
500 C.P2 65,4
00
re
ma i
ndert
hefol
lo
wingmont
h. B.P2 30,
000 D.P2 51,4
00
TheJanuar
ycashcol
lec
ti
onsfr
omsalesar
e:
A.P8 15,0
00 C.P4 71,
000 2
3
. Th
eLeAmo
reCo
mpa
nyh
adt
hef
ol
lo
win
gbu
dge
teds
ale
sfo
rth
efi
r
s th
alfo
fth
ecu
rr
ent

440

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Budget
ing

y
ear
: Sal
esthr
eemo nt
hspr
iort
oc u
rre
ntmon
th 4%
Ca
s hSal
es Cr
edi
tSal
es Cas
hd i
scount
s(2/
30,n
e t
/90
) 2%
Ja
nuary P70,
000 P340,
000 Doub
tf
ulaccoun
ts 1%
Feb
ruar
y 50,
000 190,
000 Cr
edi
tsale
s:
Marc
h 40,
000 135,
000 November–esti
mat
ed P2,
000
,00
0
Apr
il 35,
000 120,
000 Octo
ber 1,
800
,00
0
May 45,
000 160,
000 Sept
emb er 1,
600
,00
0
Ju
ne 40,
000 140,
000 August 1,
900
,00
0
Howmuchistheest
imat
edc r
edi
ttoAcc
oun
tsRec
eiv
abl
easare
sul
tof
col
l
ect
i
onsexp
ect
ed
Thec
ompan
yisi
nth
eproc
essofp
repa
ri
ngacashbu
dgeta
ndmust
det
ermi
neth
eexpec
ted du
ri
ngNovember?
ca
shcol
l
ect
i
onsb
ymo n
th.
Toth
isend
,thef
ol
lo
wingi
nf
or
mati
onh
asbee
na s
sembl
ed: A.P1 ,
730,
200 C.P1,76
2,0
00
B.P1 ,
757,
200 D.P1,80
2,0
00
Co
ll
ect
i
onso
nsa
les
: 60
%i nmont
ho f
sale
30
%i nmont
hfol
lowi
ngsale I
n c
rea
seinacco
untsre
c e
iva
ble
2
6
10
%i nse
condmo nt
hfol
lo
wingsal
e .L azar
oComp anywil
lopenanewst
or
eonJanua
ry1.Basedo
nex
per
i
enc
efr
omi
t
sot
her
Th
ea c
count
srecei
vab
leba
lanc
eonJanu
ary1o ft
hecurr
entyearwasP70,00
0,ofwhi
ch ret
ai
lout
l
ets,
Lazaroismaki
ngt
hef
ol
lo
win
gsa
lespro
jec
ti
ons
:
P5
0,00
0r ep
rese
ntsu n
col
l
ect
edDe c
embersal
esa ndP20,000r e
pres
entsuncol
l
ect
ed
Nov
embersal
es. CashSale
s Cred
itSal
es
Th
etot
alca
shcoll
ect
edbyLeAmor
eCompanyduri
ngt
hemon t
ho f
Januar
ywouldbe: Januar
y P600,
000 P400,
000
A.P410,0
00 C.P3 44
,000 Febr
uary 300,
000 500,
000
B.P254,0
00 D.P3 31
,500 March 400,
000 600,
000
Apri
l 400,
000 800,
000
Acc
ount
srecei
vabl
ebala
nc e Laz
aroest
imat
esthat70
%o fthecred
itsal
eswillb
ecoll
ect
edinthemo n
thfol
lo
wingt
he
2
4
.Aso fJan
u a
ry1,2007,theLi
ber
a l
Sa l
esCompanyhadana cc
ountr
ecei
vabl
eofP500,
000. mont
hofthesal
e,wi
thth
eb a
lan
cec ol
l
ect
edintheseco
ndmo nt
hfol
lowi
ngthesal
e.Bas
ed
Th
es al
esforJan
uary,Febr
uar
y,andMa r
chwe r
easfoll
ows:P1,20
0,000
,P1,4
00,00
0a nd ont
hesedata
,th
eb a
lan
ceinacc
o u
ntsrec
eiva
bleonJan
uary31wil
lbein
creas
edby
P1,
500,
000,re
spect
iv
e l
y.Ofeachmo n
th’
ssal
es,80%isonaccou
nt.6 0
%o fac
countsa
les A.4 00
,000 C.P1 20,
000
i
scol
le
ctedint
hemo nthofs
ale,
withremai
ni
ng40%c o
ll
ecte
dinthefo
ll
owin
gmo nt
h. B.P2 80,
000 D.P5 80,
000
Whati
stheaccoun
tsrecei
vab
lebalan
ceaso f
March31,2007?
A.P7 20
,000 C.P5 87,2
00 Cas
hdi s
burs e
me nt
s
2
7
B.P4 80
,000 D.P6 00,0
00 .Ca scad
e sComp an
y,ame rc
h a
ndi
sin
gfir
m,ispr
epar
ingi
tsmast
erbud
getandhasgat
her
ed
t
hefol
lowingdat
atoh el
pbudgetca
shdisbu
rse
ments:
Cr
edi
ttoacc
o u
ntsrecei
vab
le Budgeteddat
a:
2
5
.Iro
n ma
nCo mp anyispre
par
in
git
sc as
hb udg
etf
orthemon
thendi
ngNo
vember30
.Th e Costofgoodssold P1,6
80,0
00
f
ol
lowi
nginf
ormati
onpert
ai
nst
oIr
onman’
sp a
stco
ll
ect
i
onex
peri
enc
efr
omi
tscr
edi
tsa
les: Desi
redd ec
reasei
ninvent
ori
es 70,0
00
Cur
rentmonth’
ssal
es 12% Desi
redd ec
reasei
nAc co
u n
tsPayab
le 1
50,0
00
Pr
iormonth
’ssal
es 75% Al
lo fthea cco
untsp ay
abl
e sareforinv
ent
orypurch
asesanda l
lin
vent
or
yi t
emsare
Sal
estwomo nt
hspri
ort
ocur
ren
tmo n
th 6% pu
rchasedo naccount
.Wh atar
ethee s
ti
mate
dc a
shd i
sbu
rse
me n
tsfo
rinv
ent
ori
esfort
he

441

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Budget
ing

bu
dge
tperi
od? a
. Eachmont
h’ssal
esarebi
ll
edonthela
stdayoft
hemonth.
A.P1,4
60,0
00 C.P1
,90
0,0
00 b
. Cust
omersarea l
l
oweda3p e r
cen
tdisc
ounti
fpaymenti
sma dewit
hin10
B.P1,6
00,0
00 D.P1
,76
0,0
00 daysaf
t
erthebi
ll
i
ngdat
e .Recei
vabl
esarebook
edgross
.
c
. Six
typer
centofth
ebil
li
ngsarecol
l
ect
edwithi
nthedi
scou
ntperi
od,t
went
y-
2
8
.Al
bat
rossCo mpanysta
rtedit
scomme rc
ialop
e r
at
io
nso nSeptember30o ft
hec ur
ren
tyear. fi
veper
cen
t ar
ecol
le
cte
db ytheendoft
hemo nt
h,ni
neperc
entar
ecoll
ect
edbytheen
d
Pr
oj
ectedma nufac
tur
ingc o
stsforthefir
stthr
eemo nth
so fo per
ati
onsa r
eP1 ,5
68,000
, ofth
eseco
n dmont
h,andsixper
centar
econsi
der
ede n
ti
rel
yunco
ll
ect
ibl
e.
P1,
952,
00 0,andP2 ,
176,00
0,respect
ive
ly. Depr
eci
ati
on,insur
ance,andp ro
pert
yt a
xes
r
epr
esentP2 88,00
0o fthee st
imate
d ma nuf
act
uri
ngc ost
s. I n
surance wasp ai
do n Pur
chas
es:
Sep
tembe r30,an
dp r
opert
ytaxeswil
lbep a
idinJul
ynextyear
.Se vent
y-
fiv
ep er
centoft
he 1. Fi f
tyfourperc
en tofal
lp u
rchas
esa ndsel
l
ing
,g e
ner
al
,andadmi
ni
st
rat
i
veexpens
es
r
emaind
e rofth
ema nuf
actur
ingcost
sa r
eexpect
edtobep a
idinthemonthinwhicht
heyare ar
epaidinthemo nthpur
chasedandthere
ma i
nderi
nth
efol
l
owin
gmont
h.
i
ncur
red
,wi ththebalancetob ep ai
dint h
ef ol
l
owingmo nt
h. Th eca s
hp ayment
sf o
r 2. Ea chmo n t
h’
su nit
sofen d
ingin
vento
ryi
se qualt
oonehun
dredt
hi
rt
yperc
entoft
he
manuf
acturi
ngcost
sinthemo nt
ho f
No v
emberare: ne
xtmo nt
h’suni
tso fs
ales.
A.P1 ,
56 8,
000 C.P1 ,
664,
000 3. Th ec os
t ofea
chu nito
finven
tor
yisP200.
B.P1 ,
95 2,
000 D.P1 ,
856,
000 4. Se ll
ing
,g ener
al,anda dmi
nist
ra
ti
veexpense
s,ofwhi
chP20,
000i
sdepr
eci
ati
on,ar
e
eq
ualtofi
ft
eenp er
c en
tofthecur
rentmont
h’
ssales.
Endi
ngc a
s hbal
anc e
2
9
.Albani
aCo mp a
n yexpect
sit
sJ unesal
estobeP3 0
0 ,
000,whichi
s2 5%high
erthanit
sMa y Ac
tua
lan
dpr
oj
ect
eds
ale
sar
easf
ol
lo
ws:
sa
les.Pur
chaseswe r
eP2 00
,000inMaya ndareexpe
cte
dt obeP2 40,
000i
nJ un
e.Allsal
es UNITS PESOS
ar
eo nc r
edi
tan da r
ecoll
ect
eda sfol
l
ows:80 %inthemo nthofthesal
ea nd20%i nthe November 11
,800 P3
,54
0,0
00
f
ol
lowi
n gmonth.Al
l pa
ymentsinthemont
ho fsal
esaregiven2%d is
count
.Si
xtyper
c e
ntof December 12
,100 3
,63
0,0
00
pur
chasesarep ai
dinthemo nt
ho fpur
chasetotak
ea dvant
ageo fpur
chas
etermo f1/
10, Ja
nua r
y 11
,900 3
,57
0,0
00
n/
40.Theremainin
ga mountispaidi
nthefol
lowi
ngmo n
th.Theb egi
nni
ngcashbala
n c
eo n Febr
uary 11
,400 3
,42
0,0
00
Ju
ne1i sP20,0
0 0.Theendi
ngc a
shbalan
ceo nJune30wo ul
db e
: Marc
h 12
,000 3
,60
0,0
00
A.P6 4,160 C.P8 0,
640 Apr
il 12
,200 3
,66
0,0
00
B.P7 3,000 D.P8 5,
440
3
0
.Ther
espec
ti
veamoun
tsofbud
get
edp
urc
has
esf
ort
hemo nt
hsofJan
uarya
ndF
ebr
uar
y
Compr ehensi
ve ar
e:
Qu est
i
onNo s.30thr
ough33areba
sedonthefo
ll
owi
ngi
nfo
rmat
io
n: A.P2,4
18,00
0andP2,
360,
000 C.P2,
250
,00
0a ndP2
,43
6,0
00
Ap o
ll
oMe rchan
d i
serask
sy ou
rser
vic
estodevel
opcas
ha ndot
herbu
dge
tin
for
mati
onfort
he B.P2,3
80,00
0andP2,
280,
000 D.P3,
570
,00
0a ndP3
,42
0,0
00
fi
r
s tqua
rte
ro f2
0 0
7.InDe c
ember31,
thest
orehadt
hef
oll
owi
ngbal
anc
e:
Cash P 5 5,0
00 3
1
.Th
ebu
dget
edcas
hdi
sbu
rse
men
tsf
ort
hemo
ntho
fFe
bru
aryar
e:
Accou
n t
srecei
vabl
e 4,
370,
000 A.P2,
929
,00
0 C.P2,
949,
000
I
nvent
ori
es 3,0
94,0
00 B.P2,
873
,79
0 D.P2,
853,
790
Accou
n t
spayabl
e 1,3
30,5
50
3
2
.Th
eamoun
tofcas
hco
ll
ect
edf
ro
msa
lesd
uri
ngt
hemont
hofJa
nua
ryi
s:
Th
efol
lowi
ngi
nf
or
mat
i
ona
rer
el
eva
ntt
o20
07o
per
at
io
ns: A.P3,
338,
760 C.P3,
404,
100
Sa
les: B.P3,
551,
160 D.P3,
556,
560

442

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 lOMoARcPSD|37346555

Budget
ing

3
4
.Ho
wmuchwi
l
lbep
aidi
nth
emo
ntho
fJa
nua
ryfo
rth
epurc
has
eof
mat
er
ia
ls?
3
3
.Th
enumb
ero
fun
it
stob
epu
rch
ase
ddu
ri
ngt
hemo
nthof
Mar
chi
s: A.P27,
200 C.P137
,85
6
A.15
,86
0 C.12,
000 B.P1
17,
200 D.P3 3
,60
0
B.12
,26
0 D.15,
600
3
5
. Ho
wmuchdoe
sAt
l
ant
apl
ant
odi
sbu
rsei
nth
emont
hofJu
ne?
Raj
ahEnt
er
pri
sesi
sagrowi
ngr
etai
l
ero
fhomecar
eprod
uct
s.Du
ri
ngt
hefi
r
s t
fou
rmo
nth
sof
the A.P41,6
00 C.P20
7,2
00
f
ol
lo
wingy
ear
,itf
or
eca
ststh
efo
ll
owi
ngsal
esan
dpurc
hases
: B.P1
00,0
00 D.P11
7,2
00

Sal
es Pu
rch
ases Quest
ionNos
.36thr
ough38ar
ebasedonthef
ol
lo
win
g:
Jan
uary P7,
200,
000 P4,
200,
000 SuperSal
es’
act
ualsal
esandpur
chase
sforApr
il
andMaya
res
hownh
erea
lon
gwi
t
hfo
rec
ast
ed
Febr
uar
y 6,
600,
000 4,
800,
000 sa
lesandpur
chas
esforJu
neth
roug
hSe pt
ember
.
Marc
h 6,
000,
000 3,
600,
000
Apr
il 7,
800,
000 5,
400,
000 Sal
es Pur
cha
ses
Raj
ahcol
l
ect
s70%ofsal
esi
sco
ll
ect
io
nd u
ri
ngthemontho
fsal
e,2
0%t
hef
ol
lowi
ngmont
han
d Apr
il
(Act
ual
) P3
90,
000 P2
00,
000
9%int
heseco
ndmo
n t
h.1%ofs
ale
sa r
edeemeduncol
l
ect
i
ble
. May(Act
ual
) 4
20,
000 2
20,
000
Ju
ne(for
ecas
t) 3
90,
000 2
10,
000
I
norde
rtof
ul
lya
vai
loft
he2%dis
cou
nt,Ra
jahp
aysa
llt
hep
urc
has
esb
yth
ete
ntho
fth
emo
nth Ju
ly(f
or
ecast
) 3
50,
000 2
40,
000
f
ol
lo
wingt
hemont
hofpu
rch
ase
. Augu
st(f
ore
cast
) 4
20,
000 3
20,
000
Sept
ember(f
or
ecas
t) 4
10,
000 2
30,
000
Sal
esf
orthemont
ho fMayar
ee xp
ect
edtob
eP6,
600,
000an
dthea
mo u
nto
fpur
chas
esare
P6,
000
,00
0.Op e
rat
in
ge x
pens
estobepai
ddu
ri
ngt
hemont
hofMa
ywi
llb
eP1,
440
,00
0a ndt
he Thecomp
anyma k
es10perce
ntofi
tss
alesfo
rcashand90per
centoncr
edi
t.Of t
hec
redi
tsal
es,
ca
shbal
ancebyMay1isP2,
200,
000. 30per
cen
tarecol
l
ecte
dinth
emo nt
haf
terth
es al
ean
d7 0pe
rcen
ta r
ecol
le
ctedtwomont
hsa f
t
er.
Supe
rSal
esp a
ysfor45pe
rcen
tofi
tspur
chasesi
nthemont
haft
erpurc
hasea n
d5 5pe
rcentt
wo
Th
eAt
l
ant
aCo
rpo
rat
i
onh
asf
or
eca
stt
hef
ol
lo
win
gsa
lesf
ort
hefi
r
s t
sev
enmo
nth
sof
they
ear
: mont
hsaf
ter
.

Ja
nuary P1
20,
000 May P1
20,
000 Lab
orexpe
n s
eequal
s1 5per
cento
fthecur
re
n tmont
h'
ssal
es.Genera
lover
headexp
enseequa
ls
Feb
ruar
y 1
60,
000 Ju
ne 2
00,
000 P10,
000permon
th.I
nte
res
tpayment
sofP35,
00 0ar
eduei
nJuneandSe p
tember
.Acashdi
vi
dend
Marc
h 1
80,
000 Ju
ly 2
20,
000 ofP25,
000issched
uledt
ob ep a
idinJune.T a
xp a
yment
so fP30,
000a r
ed u
einJ un
ea nd
Apr
il 2
40,
000 Sept
ember
.Ther
eisasche
duledpur
chas
eforcashofane
qui
pme n
t,P290
,000i
nSepte
mber.

Month
lymater
ial
pur
chasesares e
tequal
to20p erc
entoff
or
ecast
edsale
sforth
en e
xtmo nt
h.Of Supe
rSa l
es’endi
ngcashbal
anceinMayisP2 5,
000.Themin
imu
md esi
r
edc a
shb a
lan
ceis
t
hetotalmate
ri
alcost
s,40p er
c e
ntarepai
dint hemo n
thofp ur
chas
ea nd60p er
centinthe P20,
000
.Th ema x
imumd e
sir
edcashbal
anc
eisP50,0
0 0
.Exc
essca
sh(ab
oveP50,0
00)i
sused
f
ol
lowi
ngmo nt
h.Lab
orcost
swi l
lr
unP60,0
00p ermonth
,andfi
xedover
headi
sP30,00
0p e
r mont
h. t
ob u
yma r
ketab
lesecur
i
ti
es.Mark
eta
blese
curi
t
iesar
es ol
dbef
or
eborr
owi
ngfu
ndsincaseofa
I
nt
erestpayment
sonthed ebtwil
lbeP45,00
0f orbot
hMa r
cha ndJune
.F i
nal
l
y,At
lan
ta’
ss al
es ca
shshor
tf
all(
l
esstha
nP2 0
,000)
.
f
or
cewi l
lr
ecei
vea3p erc
e n
tc ommis
si
ono ntot
alsal
esfort
hefir
stsi
xmo n
thsoft
heyear,t
ob e
3
6
pa
idonJ u
ne3 0
. . Du
ri
ngt
hemon
tho
fJu
ne,
Sup
erSa
lese
xpe
ctstor
ece
ivecas
hfr
oms
ale
samo
unt
i
ngt
o:
A.P60
6,0
00 C.P398,1
00

443

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 lOMoARcPSD|37346555

Budget
ing

B.P4
08,
900 D.P3
59,
100 c
ut,
thr
eaded,an
dfini
shed
.L a
styearr
awmateri
alcos
tswer
eP5 2per1,
000fast
ener
s,butMs.Te
e
h
asjustbeenn ot
i
fi
edthatma te
ri
alcos
tsh av
er i
sen,eff
ecti
veJ anua
ry1 ,t
oP6 0p er1,00
0
3
7
. Th
ecu
mu l
at
iv
eamo
unt
ofma
rke
tab
les
ecu
ri
ti
esp
urc
hasedaso
fJu
ly3
1amo
unt
sto
: f
ast
ener
s.Th eIngoCo r
pora
ti
onu sesFIF
Oi nvent
oryacc ount
i
ng.L abo
rc ost
sa r
er el
at
iv
ely
A.P126
,000 C.P1 4
3,30
0 c
onst
antatP20pert
housandfast
ener
s,s
inc
ewo rke
rsarepaidonap i
eceworkbasi
s.Over
headis
B.13
2,500 D.P0 a
ll
ocat
edatP10perthous
andu ni
t
s,andsel
l
ingandadmini
st
ra t
iv
eex p
enseis20percen
tofsal
es.
L
aborexpe
n s
eando v
erheadaredi
rec
tcas
ho ut
fl
owspaidi
nth emonthin
curr
ed,whi
lein
ter
estand
3
8
. Th
eamount
ofl
oant
obeo
bta
ine
dtoma
int
ai
nab
ala
nceofP5
0,0
00c
asha
sof
Sep
temb
er3
0 t
axe
sa r
epaidquar
ter
ly
.
wi
l
lbe
:
A.P109
.4 C.P 9 .
4 Thecor
po r
at
ionusual
l
yma int
ai
nsami n
imumcashbala
nceofP25,00
0,andit
putsi
tsexc
essca
sh
B.P5 9
.4 D.P 0 .
0 i
ntomarket
ablesecu
ri
ti
es.Theaver
a g
etaxrat
eis40p er
cent
,andthecompanyusua
ll
ypaysout
50perc
entofn e
tinc
omeind i
vid
endstost
ockho
lde
rs.Marke
tabl
esecur
it
ie
saresol
db ef
or
efun
ds
Ques
ti
onNo
s.39th
rou
gh45a r
ebasedonth
efol
lo
wingdat
a: ar
eb or
rowedwh enac a
s hshor
tageisfa
ced.I
gnor
et h
einter
estonanyshort
-t
er
mb orr
owi
ngs.
TheI
ngoCor
por
at
ionmakesst
anda
rd-s
ize2-
in
chfas
ten
ers,whi
chi
tse
ll
sfo
rP155p
e rt
hous
and
. I
nter
estonthelo
ng-t
ermde b
tispai
dinMarch
,asar
etaxesanddivi
dend
s.
I
ri
neTee,t
hema j
orst
ockho
lde
r,ma n
agestheinv
ent
orya n
dfin
anc
eso ft
hecompany
.She
es
ti
mate
ssa
lesf
ort
hefol
l
owin
gmo nt
hstobe: Asofy
ear
-end,
theIn
goCo
rpo
rat
i
onb
ala
nces
hee
twa
sasf
ol
lo
ws:
I
ngoCorp
orat
i
on
Ja
nuary P2
63,
500 (
1,
700
,00
0fa
ste
ner
s) Bal
anc
eSh e
et
Feb
ruar
y P1
86,
000 (
1,
200
,00
0fa
ste
ner
s) Dec
ember31,200
6
Marc
h P2
17,
000 (
1,
400
,00
0fa
ste
ner
s)
Apr
il P3
10,
000 (
2,
000
,00
0fa
ste
ner
s) ASSETS
May P3
87,
500 (
2,
500
,00
0fa
ste
ner
s) Cur
rentass
ets:
Cash P 30,0
00
L
astye
arIngoCorp
ora
ti
on'
ssa
leswe
reP1
75,
000i
nNo
vemb
era
ndP2
32,
500i
nDe
cemb
er Acco
u n
tsrec
eiv
abl
e 32
0,0
00
(
1,
500
,000f
ast
ene
rs)
. I
nvent
ory 23
7,8
00
To
talcu
rr
entass
ets 58
7,8
00
Ms.T
e ei
sprepar
in
gforame et
i
ngwithPeni
nsul
aBank
ingCorpo
rat
iontoar
ran
gethefi
nanci
ngfor Pl
antandequi
pment
,net
ofa
ccu
mul
at
edd
epr
eci
at
io
nof
P20
0,0
00 80
0,0
00
t
hefi
rstq
uart
er.Base
do nhersal
esfor
ecasta
ndth
efoll
owin
ginfo
rmati
onshehasprovi
ded,y
ou Tot
alAsse
ts P1
,38
7,8
00
ha
vetoprep
areamo nt
hl
ycashbu d
get,
amo nt
hl
yandquart
er
lypr
oformai
ncomestat
ement,
ap r
o
f
or
maq uar
ter
lybal
anceshe
et,andal
lnece
ssar
ysup
p o
rt
ingsche
dule
sfort
hefi
rst
quart
er. LI
ABIL
ITI
ESANDST OCKHOLDERS’
EQUI
TY
Acc
ount
sp a
yabl
e P 93,6
00
Pas
th is
tor
ys ho
wst ha
tIngoCo r
por
ati
oncol
lec
ts5 0per
centofit
sa c
count
sr e
cei
vabl
einthe Lo
ng-t
ermdebt
,8% 40
0,0
00
nor
ma l30-
daycred
itper
iod(
themo nt
haft
erth
es al
e)andtheoth
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centi
n6 0day
s(two Commonstoc
k 50
4,2
00
mont
h saft
erth
es al
e)
.Itpay
sforit
sma t
er
ial
s30d aysaf
te
rrecei
pt
.Ingener
al
,Ms .Te
elik
esto Ret
ai
nedearni
ngs 39
0,0
00
ke
epat wo-mont
hs uppl
yofinven
tor
yina nt
i
cip
ati
ono fsal
es.In
vent
oryattheb eg
inni
ngof To
talL
iabi
l
it
i
esandSt
ockh
old
ers
’Equ
it
y P1
,38
7,8
00
Decemberwas2,60
0 ,
000uni
t
s.(Thi
swasnotequa
ltoherdes
ir
edtwo-
mo nt
hsuppl
y.
)
3
9
. Th
ebu
dget
edpr
odu
cti
onr
espe
cti
vet
oea
chmo
ntho
fthefi
r
s tq
uart
eroft
hecomi
ngyea
rar
e:
Th
ema
jorc
osto
fpr
odu
cti
oni
sth
epu
rch
aseo
fra
wma
ter
i
alsi
nth
efo
rmo
fst
eel
rod
s,wh
icha
re A.1,
400
,00
0;2
,00
0,0
00;2
,500
,000 C.2 ,
500,
00 0
;2,0
00,0
00;1,
400,
000

444

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 lOMoARcPSD|37346555

Budget
ing

B.1
,40
0,0
00;
2,5
00,
000
;2,
000
,00
0 D.2
,00
0,0
00;
1,4
00,
000
;2,
500
,00
0 uni
f
orml
yt hr
oughou
tth
emo nt
h.Th esalesval
ueofshi
pmen
tsforMayandthef
or
ecast
sfort
he
nex
tfou
r month
sfol
l
ow:
4
0
. Th
eamoun
tofa
cco
unt
spa
yab
lep
aidi
nMa
rchf
ort
hep
urc
has
eof
mat
er
ia
lsi
s: May(a c
tua
l) P500,0
00
A.P15
0,00
0 C.P10
4,0
00 June 6
00,0
00
B.P12
0,00
0 D.P13
0,0
00 Jul
y 7
00,0
00
August 7
00,0
00
4
1
. Th
eex
pect
edca
shc
oll
ect
i
onso
nac
cou
ntsr
ece
iva
blei
nth
emon
tho
fFe
bru
arya
re: Sept
e mber 4
00,0
00
A.P224
,75
0 C.P9 3,00
0 Russ
onp u r
chas
esmercha
ndis
ef orres
aletomeetthecur
ren
tmo nt
h’
ss a
lesdemandandto
B.P248
,00
0 D.P1 8
6,00
0 mai
ntai
nad esi
redmont
hl
ye n
dinginv
ento
ryof25%ofthene
xtmo n
th’
ssal
es.Al
lpurc
hasesar
e
oncred
itwithte
rmsofnet
/30.Ru ss
onp ay
sfor50%o famonth’
spurc
hasesi
nthemo nt
hof
4
2
. Th
eamoun
tofa
cco
unt
sre
cei
vab
leo
uts
tan
din
gaso
fMarc
h3 1
,20
07i
s: pur
chas
ea nd50%inthemont
hfoll
owi
ngthepur
chase
.
A.P21
7,00
0 C.P31
0,000
4
6
B.P22
4,75
0 D.P10
8,500 . Ho
wmuchcas
hca
nRu
sso
npl
ant
oco
ll
ect
inSep
temb
erf
romsa
lesma
dei
nAu
gus
t?
A.P3
37,4
00 C.P400,
400
4
3
. Th
eco
stofgo
odss
oldf
ort
hefi
r
s t
qua
rt
ero
fth
ecomi
ngyea
ramo
unt
sto
: B.P3
43,0
00 D.P280,
000
A.P363
,80
0 C.P426
,40
0
4
7
B.P453
,60
0 D.P373
,40
0 . Th
ebu
dget
edpe
sov
alu
eof
Rus
son
’si
nve
nto
ryonAu
gust3
1wi
l
lbe
A.P11
0,0
00 C.P112
,00
0
4
4
. Th
eto
tal
cas
han
dma
rke
tab
les
ecu
ri
ti
esa
sof
Jan
uar
y31wil
lbe
: B.P80,0
00 D.P100
,00
0
A.P45,
450 C.P91,
800
4
8
B.P25,
000 D.P54,
450 . Ho
wmuchcas
hca
nRu
sso
npl
ant
oco
ll
ect
fr
omacc
ount
srec
eiv
abl
edu
ri
ngJ
uly
?
A.P5
74,0
00 C.P61
9,00
0
4
5
. Th
eex
pect
edne
tin
comed
uri
ngt
hefi
r
s t
qua
rt
ero
fth
ec o
mingy
ear
is: B.P6
62,6
00 D.P60
8,60
0
A.P9 1
,08
0 C.P9 6,84
0
B.P161
,40
0 D.P1 5
1,80
0

Que
sti
onNo s
. 46th
rou
gh4 8areb a
sedontheRusso
nCo r
pora
tio
n,aret
ail
erwhosesal
esar
ea l
l
mad
eo ncr
e d
it.Sal
esar
eb i
ll
edtwic
emo nt
hl
y,o
nthe10thof
themo nt
hfort
helas
thal
foft
hepri
or
mon
th’
ss a
les,andonthe20tho ft
hemo n
thfort
hefi
rsth
alfofth
ec ur
re
ntmo nt
h’
ssal
es.Th e
t
er
mso fallsale
sa r
e2 /
10,net3 0. Ba
sedup o
np as
texper
ience,t
hec ol
l
ect
ionofacco
unts
r
ece
iva
bleisasfol
lo
ws:

Wi
thi
nthedi
sco
unt
per
i
od 8
0%
Onth
e3 0t
hday 1
8%
Unc
oll
ect
ib
le 2%

Ru
sso
n’sa
ver
agema
rku
poni
t
spr
odu
ctsi
s20
%of
thes
ale
spr
i
ce.Al
lsa
lesa
ndp
urc
has
eso
ccu
r

445

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 lOMoARcPSD|37346555

1
. An swer:A
Theamo untoffi
xedc o
stsinope
rat
ingbra
nch
es’1
0wa
reh
ous
esi
sP4
00 ,
000(
thefi
xedc
ostl
i
nei
nt
er
cep
tst
he
ve
rt
ica
la x
is)
.
Tot
alopera
ti
ngc os
ts P2,
900
,000
Les
sfixedcosts 400
,000
Tot
alvari
abl
ec os
ts(10war
ehous
es) P2,
500
,000
Var
iabl
ec o
stsperbranc
h:P2,
500,00
0 10 P2 50
,000

2
. Answer:A
Cost
o f
un i
t
ssold (
0.
65xP8
00,
000
) P5
20,
000
AddDesi
redendi
nginve
nto
ry 1
40,
000
To
talco
stofgoodsava
il
abl
efo
rsa
le 6
60,
000
Deduct
Be gi
nni
ngin
vent
ory 1
30,
000
Budg
e t
edpurch
ases P5
30,
000

3
. Answer:A
Cost
o f
go od
ss ol
d P7
50,
000x0
.6 P4
50,
000
AddEndi
n gI
n v
ento
ry P8
00,
000x0
.6x0
.5 2
40,
000
To
talav
ail
ablefo
rsal
e P6
90,
000
Deduct
Be gi
nni
nginve
nto
ry P4
50,
000x0
.5 2
25,
000
Budg
e t
edp u
rchase
s,Febr
uar
y P4
65,
000

4
. Answer:D
Cost
o f
sale
s P1
20,
000
AddDesi
redendi
nginv
ent
ory 42,
000
To
talav
ail
abl
eforsa
le 1
62,
000
Deduct
Bu d
gete
dp u
rchas
es 1
00,
000
Begi
nni
nginve
ntor
y P62,
000

5
. Answer:A
To
talpay
me nt
sforpu
rchas
esinJune P1
40,
000
Deduct
pa y
me nt
sappl
i
cabl
etopurcha
seof:
June (P100,
000x0.
6) P6
0,0
00
May (P200,
000x0.
30) 6
0,0
00 1
20,
000
Pay
me nt
sa pp
li
cabl
etoApri
lpur
chase P20,
000
Cr
editpu
rchasei
nAp r
il
:P20,0
00 0 .
10 P2
00,
000

6
. Answer:C
Budg
e t
edsal
es,Fi
rst
Qu a
rt
er 1
20,
000u
nit
s
AddRequir
edEndi
ngFini
shedg
ood
s: 3
0%x1
60,
000 48,
000u
nit
s
To
taluni
t
srequi
red 1
68,
000u
nit
s
Le
ssBe gi
nni
ngFini
shedgoo
ds 36,
000u
nit
s
Budg
e t
edprod
ucti
oninuni
t
s 1
32,
000u
nit
s

7
. Ans
wer:C
Sal
esf
orthr
ee-
mon
thp
eri
od:
Ju
ly 40
0,0
00
Augu
st 40
0,0
00x1
.05 42
0,0
00
Sept
ember 42
0,0
00x1
.05 44
1,0
00
To
tal 1
,26
1,0
00

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 lOMoARcPSD|37346555

I
nvent
ory,
Sep t
ember3
0 (
441
,00
0x1
.05x0
.8) 37
0,4
40
To
talRequi
rement
s 1
,63
1,4
40
Le
ssJ u
lyInv
entor
y 30
0,0
00
Budg
e t
edProduct
i
on 1
,33
1,4
40

8
. An s
wer:C
Be
ginn
ingI
nvent
ory (
800
0x3
.5) 28
,00
0
Req
uir
edPurcha
ses 8
,00
0
Di
re
ctMate
ri
alsUsedf
orPr
odu
cti
on (
800
0x3
) (
24,
000)
Des
ir
edEndin
gInvent
or
y 12
,00
0

9
. An swer
:C
LLMMNNBudget
e dp rod
ucti
on622
,0006
22,
000
622
,00
0Re
qui
re
d mat
er
ial
sp eruni
tofp r
oduc
t0.
501.
001.
2Ma
ter
i
als
re
qui
red3
11,00
06 2
2,000746
,400Uni
tcost P0 .
60 P1.
70 P1
.00Pe
soamoun
tsofmat
eri
al
su s
edbyuni
ts
pr
oduce
d
P186
,600
P1,
057,
400
P746
,400
Budget
edsalesi
nu ni
t
s 6
40,
000
AddFin
ishedgoods,en
d 90,
000
Tot
al 7
30,
000
DeductFi
ni
shedgoods,begi
nni
ng 1
08,
000
Budget
edp r
oduct
io
n 6
22,
000

10
. An
swer:D
Req
uir
edp o
undsbyprod
uct
io
n 1
80,0
00
En
dingrawmate
ri
alsr
equi
re
d 60,0
00
Be
ginni
ngrawmate
ria
ls (30,
000)
Bu
dgetedpur
chas
es 2
10,0
00

11
. Answer
:B
Mater
i
alsreq
uir
edbyJun
epro
duct
io
n1 ,
300x2 2
,60
0
AddEnd i
ngr
awma t
er
ial
si
nve
nto
ry1 ,
600x2x0.
5 1
,60
0
To
talma t
er
ia
lsr
equi
re
d 4
,20
0
DeductBegi
nni
ngmat
eri
al
si
nven
tor
y1,300x2x0
.5 1
,30
0
Mater
i
alstobepur
cha
sed 2
,90
0

12
. Answer
:D
Budge
tedsal
es 1
8,0
00
AddFi
nish
edg oodsi
nve
nto
ry,e
nd 1
1,4
00
To
tal 2
9,4
00
Deduc
tFini
shedgoodi
nvent
or
y,be
gin
nin
g 1
5,0
00
Budge
tedpro
du c
ti
on 1
4,4
00

Rawma t
er
ial
sre
quir
edbypro
duct
ion (
14,
400x6 0
.9) 6
,00
0
Desi
r
edRa wmater
i
alsi
nven
tor
yend 24
,40
0
To
tal 1
20,
400
Deduc
tRawma t
eri
al
sinv
ent
ory,
begin
nin
g 21
,00
0
Budg
etedpur
chas
eo fr
awmater
ial
s 99
,40
0

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 lOMoARcPSD|37346555

13
. Ans
we r
:D
Rawma t
er
ial
sreq
u i
r
edb yJunepr
oduc
ti
on: 1
,20
0x2 2
,40
0
Add:Endi
ngmateri
al
sinven
tor
y 1
,30
0x2.1
.5 3
,90
0
To
talmat
eri
al
srequi
red 6
,30
0
Deduct
Begi
nni
ngma te
ri
a l
inv
ent
ory 2
,40
0x1
.5 3
,60
0
Budget
edmate
ri
alspur
chase 2
,70
0

14
. Ans
wer:A
Budg
ete
dsal
es 3
00,
000
Le
ssdecr
eas
einFi
ni
she
dgo
odsi
nve
nto
ry 10,
000
Budg
ete
dpro
duct
i
on 2
90,
000

Mat
eri
alQre
quir
edb
yp r
odu
cti
on 2
90,
000x3 8
70,
000
Le
ssdecr
easei
nMate
ri
alQinv
ent
ory 6
0,0
00–80,
000 20,
000
Budg
ete
dpurch
asei
npounds
,Mate
ri
alQ 8
50,
000

15
. Ans
wer:B
Mat
eri
al
sre
qui
r
edbypr
oduct
i
on 5
00,
000x2 1
,00
0,0
00
I
ncr
easedi
nmat
er
ia
lsi
nve
nto
ry (
50,
000–4
0,0
00) 1
0,0
00
Pur
chas
es 1
,01
0,0
00

16
. Answer:B
Mat
e r
i
alsreq
uir
edby2ndQu ar
ter
’spro
duc
ti
on 4
5,0
00x2.
5kgs. 1
12,
500
Add:Ma t
er
ial
sinv
ento
ry,end
: 4
0,0
00x2.
5x0.
25 25.
000
To
talmater
i
alsre
quir
ed 1
37,
500
Le
ss:Ma te
ri
alsi
nvent
ory,
begi
nning
: 1
12,
500x0
.25 28,
125
To
talbudget
purch
asesinki
log
rams 1
09,
375

17
. Ans
wer:D
Unde
rfl
exi
blebudget
,anal
ysi
sshou
ldbebas
edona c
tua
lle
vel
ach
iev
ed.
I
ndi
rec
tlaborcos
tperuni
t ( P360,0
00 200
,000uni
t
s) P1.
80
Fl
exi
bl
eb u
dg e
tall
owanc
e: 1 4
,500uni
t
sxP1.80 P2
6,1
00

18
. Ans
we r
:C
Cashsal
es(Marc
h) 0.
2xP420,
000 P8
4,0
00
Col
lec
ti
onsofacco
unt
sal
es:
Marchsal
es: (P420
,00
0x0.8x0
.7) 2
35,
200
Febr
uarysal
es: (P300
,00
0x0.8x0
.25
) 60,
000
Januar
ysale
s: (P240
,00
0x0.8x.
05) 9,
600
To
talca
shfromsal
es P3
88,
800

19
. Ans
we r
:B
To
talc
ashcol
le
cti
ons P5
7,0
00
Deduc
ti
onscol
l
ect
ion
so nSept
embe
rsale
s (
P80
,00
0x0
.6) 4
8,0
00
Col
le
cti
onsapp
li
cabl
etoJul
yandAugu
stsal
es P9,0
00
Cr
edits
ale
sinJul
y:P9,00
0 2 0.15 P3
0,0
00

20
. An
swer
:D
Col
l
ect
i
onsf
rom:
Janu
arys
ales (
P86
0,0
00x0
.8x0
.75
) P5
16,
000

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 lOMoARcPSD|37346555

Dece
mb e
rsal
es( J
anuar
y1Ac co
unt
s) 2
99,
000
Col
l
ect
ion
so f
credi
tsal
es 8
15,
000
Cashsal
es (
P860,
000x0.
2) 1
72,
000
To
talca
shrecei
ved P9
87,
000

21
. Answer
:A
Col
le
cti
onssal
esof
:
Ju
ne: P8
,00
0x0
.7 P5
,60
0
May: P7
,00
0x0
.3 2
,10
0
To
talco
ll
ect
i
onsfr
omsa
les P7
,70
0

22
. Ans
wer:B
Oct
obe
r9 0
,000x.95 P85,
500
Nov
ember1 0
0 ,
000x.8
5 85,
000
Dec
ember8 5,0
00x.70 59,
500
Fo
urt
hq u
art
ersal
escol
lec
tedi
nfo
urt
hqu
art
er P2
30,
000

23
. Ans
we r
:D
Cashsal
es P7
0,0
00
Col
lec
ti
onsfr
oma c
cou
nts
ale
s:
Januar
y (
P34
0,0
00x0
.60
) 2
04,
000
December (
P50
,00
0x30
/40
) 37,
500
November 20,
000
To
talca
shrecei
pt
sinJ
anu
ary P3
31,
500

24
. An s
wer:B
Theba
lanc
eo f
Account
sRece
iva
ble
,base
dont
hec
oll
ect
i
onp
att
er
nfo
rLi
ber
alSa
lesCo
mpa
ny,
equ
als4
0pe
rce
nto
f
cr
edi
tsal
esf
ortha
tmonth:
P1,
500,
000x0.8x0.
4=P4 8
0,000

25
. Ans
we r
:C
Gr
ossrec
eiv
abl
eco
ll
ect
edmo
nth
’ss
ales
Nove
mb er 2,
000,
000x.
12 P2 4
0,0
00
Oct
ober 1,
800,
000x.
75 1
,35
0,0
00
Sept
ember 1,
600,
000x.
06 9
6,0
00
Augu
st 1,
900,
000x.
04 76,
000
To
talc
redi
t P1
,76
2,0
00

26
. An swer
:A
Thebal
a n
ceo fAccou
ntsRecei
vab
leaso fJanuar
y3 1
,itsfi
rstmont
hofoper
at
io
ns,wi
lli
ncr
eas
eb yP400,
000
be
causethefi
r
s t
col
le
cti
ononacc
ountsal
eswil
lbeinFebr
uary
.
Howe
ver,aque s
ti
onofhowmuchincr
easeinAcco
u n
tsRecei
vablei
nFebr
uar
ywil
lequ
alt
othedi
ff
ere
nceb
etween
t
heFebruar
ycredi
tsal
esand7
0%o fJanu
a r
ysal
es.

27
. An
swer:D
Cos
tofgo
odssold P1
,68
0,0
00
Ded
uctde
sir
eddecre
aseinin
vent
ori
es 7
0,0
00
Bu
dget
edpurch
ases P1
,61
0,0
00
Ad
dd e
cre
aseinAccoun
tsPayab
le 15
0,0
00
Bu
dget
edpaymentsf
orpurc
hases P1
,76
0,0
00

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 lOMoARcPSD|37346555

28
. Ans
we r
:A
Nove
mb erc
osts (
P1,
952
,00
0–P2
88,
000
)x0
.75 P1
,24
8,0
00
Oct
obercos
ts (
P1,
568
,00
0–P2
88,
000
)x0
.25
) 32
0,0
00
To
taldi
sbur
sement
s P1
,56
8,0
00

29
. Ans
we r
:C
Begi
nni
ngCa sh P2
0,0
00
Add:
Cashcoll
ect
edo nJun
e'ssal
es (
P300,
000x.
8x.98
) 235,
200
Cashcol
l
e c
tedonMa y'
ssal
es (
(P3
00,0
00/
1.
25)x.
2)4
8,0
00 2 8
3,2
00
To
tal P3 03,2
00
Le
ss:Cashpai
do nJune'
spurc
hases (P2
40,
000x.
6x.9
9) 1
42,
560
Cashpai
do nMay'spur
chases (
P200,
000x.
4) 80,
000 22
2,5
60
Endi
ngcashbala
n ce P8
0,6
40

30
. An swer:C
Ja
nuaryFe
bruar
yBudget
ed sale
s 1
1,90
011,
400Add: En
ding in
vent
ory(130
%) 1
4,820
15,60
0To
tal
26,
720
27,
000
Les
s:
Begi
nni
nginven
tor
y15,
47014
,820Budget
edpur
chase
s(uni
ts
)11
,2501
2,1
80Un
itpu
rchas
ep r
ic
e 200 200
Budg
e t
edpesopurc
hases
P2,2
50,000P2
,436
,00
0
Budget
edinv
ento
ri
es:
December31 130
%x1 1,
900 1
5,470
Januar
y31 130
%x1 1,
400 1
4,820
Febr
uary28 130
%x1 2,
000 1
5,600
March31 130
%x1 2,
200 1
5,860

31
. Answer
:D
Pay
me nt
sfor:
Febr
uarypurc
hases 54%xP2,
436,
000 P1
,31
5,4
40
Ja
nu a
ryp u
rcha
ses 46%xP2,
250,
000 1
,03
5,0
00
To
talpayment
sforpu
rchas
es P2
,35
0,4
40
Sel
l
ing,gener
alandadmi
nis
tr
at
iv
ee x
pen
ses
:
Febr
uary: [(
P3,
420,
000x0.15
)–P20,
000
]0.
54 26
6,2
20
Ja
nu a
ry: [(
P3,
570,
000x0.15
)–P20,
000
]0.
46 23
7,1
30
To
talcashdi
sbur
sements P2
,85
3,7
90

32
. Answer
:A
Bi
l
ling
so f
De c
ember31
:
Col
lec
ti
onswit
h3%d i
sco
unt P3
,63
0,0
00x0
.6x0.
97 P2
,11
2,6
60
Col
lec
ti
onsendofJ
anuary P3
,63
0,0
00x0
.25 90
7,5
00
Bi
l
ling
so f
No v
ember30
: P3
,54
0,0
00x0
.09 31
8,6
00
To
talcol
l
ecti
ons P3
,33
8,7
60

33
. Ans
we r
:B
Budge
tedMarchsal
es 1
2,0
00
Add:Endi
nginve
ntor
yunit
s 1
5,8
60
To
talun
it
srequi
red 2
7,8
60
Le
ss:Be g
inn
inginv
ento
ryuni
ts 1
5,6
00
Budge
tedpur
chasesinuni
t
s,Marc
h 1
2,2
60

34
. An
swe
r:A

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 lOMoARcPSD|37346555

Pay
me n
tsf
orpu
rch
asesi
nthemont
hof:
De c
ember (
0.
2xP1 2
0,0
00x0
.6) P1
4,4
00
Januar
y (
0.
2xP1 6
0,0
00x0
.4) 1
2,8
00
To
talJ
anuar
ydi
sbur
seme
ntsfo
rpur
cha
ses P2
7,2
00

35
. Answer:C
Pay
me ntsf
orpurc
hases
:
Ma yp ur
chas
e (0
.2xP2
00,
000x0
.6) P2
4,0
00
Ju nepurc
hase (0
.2xP2
20,
000x0
.4) 1
7,6
00
Tot
al 4
1,6
00
La
bo rcost
s 6
0,0
00
Fi
xedOv er
head 3
0,0
00
I
nt
erestpayment
s 4
5,0
00
Commi s
sio
n( 0.
03xP1,0
20,
000
) 3
0,6
00
Totaldi
sbur
sement
s P20
7,2
00

36
. Answer
:C
Ju
n ecas
hsale
s( P390
,00
0x0 .
1) P3
9,0
00
Col
lec
ti
onsfr
oma cc
ounts
ale
s:
Apri
lsal
es (P3
90,
000x0
.9x0
.7) 2
45,
700
Maysal
es (P4
20,
000x0
.9x0
.3) 1
13,
400
To
talca
shrecei
pt
s,Jun
e P3
98,
100

37
. An
s wer
:B
Marke
tabl
ese
curi
t
iesp
urc
has
edo
n:
Ju n
e P 5,
600
Ju l
y 1
26,
900
Cumulat
i
vepur
chas
eofMS P1
32,
500

38
. An swer:A
CashBudget(P’0
0 0)
Ju
neJul
yAugSeptCashrece i
pt
sP398.
1P404.
9P382.
2P374.
9Cashdisb
ursement
s3 67.
52 78.
02 96.
57 02.
5Netcashinfl
ow
(
out
fl
ow) 3 0.
61 2 6.
98 5.7
(327.
6)Begi
nni
ngcashbal
ance2 5 .
05 0.
05 0.
05 0.
0Cumul
ati
vecashb a
lan
ce5 5.
6
176.
91 35.7(277.6)
M/Ss ol
d(pur
chas
ed)- 5 .
6-126.
9-8 5.
72 18.2
Cashloan 0 .0 0.0 0 .0109.4Cas h
bal
ance,en
dP5 0.
0P5 0
.0P5 0.
0P5 0.
0
CashRecei
pts(P’000)
Ju
n eJ
uly
Au gSeptAcco
u nts
ale
s(90%)P351.
0P315.
0P378.
0P369.
0Cashs a
les
P3 9.0P35.0P42.0P4 1.
0Coll
ect
iono f
account
sF i
r
stmonth(30%)2 4
5.7105.39 4.5113.4 Se co
ndmo nt
h(70%)1 13.
42 64.
62 45.
7
220.
5Tot
al
P398.
1P4 04
.9P382.
2P3 74.
9
CashPayments( P’0
00)
J un
eJul
yAugSeptPurchasesP210.
0P240.
0P320.
0P230.
0Fi
rstmont
h(45%)P9 9.
0P9 4.5
P108.0
P144.0Secon
dmo nt
h( 55%)
110.0121 .
01 1 5.
51 32.
0T ot
alpur
chasespai
d2 0
9.0215.5223.52 76
.0Lab
or5 8
.55 2.56 3.
0 6 1.
5Ge neral
over
head1 0.01 0.
01 0.01 0.0
Int
ere
s t35.03 5.0
Cashd i
vi
dend2 5
.0Tax
es3 0.
03 0
.0Purc
h a
seofeq ui
pt.
290.0T
otal
payment
sP367.
5P2 78
.0P296.
5P7 02.
5
39
. An swer:A
Budget
edProd u
cti
o n
Jan
uaryFeb
ruar
yMarch
Tot
alSal
es1,7
00,00
01,20
0,000
1,400
,0004,
300,0
00In
ven t
ory,
end2,
60 0
,0003
,400
,0004,
500,
0004,
500,
000To
tal
4,30
0,0004,
600,
0005,
900,
0008,
80 0
,000
Inven
tory
, beg.
(2,900,
000(2
,600,
000(
3,4
00,000
(2,
900,
000Budget
edproduc
ti
on1,
400,0
002,0
00,00
0 2,
500,
0005,
900 ,
000
40
. An swer:B

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Pay
me n
tsf
orPur
cha
ses:
Ja
nuary (
Decemberp
urc
hases-1,
800,
000x0.
052
) P93,
600
Feb
ruar
y (
Jan
uarypur
chas
es–1,4
00,
000x0.0
6) 84,
000
Marc
h (
Febr
uarypu
rch
ases–2,
000,
000x0.
06) 1
20,
000
To
talf
ort
hequa
rt
er P2
97,
600

41
. An s
wer:B
Budg
ete
dCo l
lect
i
onsonAc coun
tsRecei
vabl
e
Januar
yFebr
ua r
yMarc
hTot
alNovembersal
es87
,50
087,
500
De c
embersal
es116
,2501
16,2
50232,
500J
anu
ary
sal
es131,
750131
,7502
63,5
00Febr
uar
ysal
es
93,
00093
,000To
tal
203
,7502
48,0
00224,
7506
76,
500
42
. An s
wer:C
Amonth
’ssal
esiscol
le
cted50p e
rcen
teachinthefi
r
s t
andseco
ndmont
h.Th e
ref
ore,t
heacc
ount
srecei
vab
le
ou
tst
andi
ngaso f
Ma r
ch31i n
clu
desMa r
ch’
ssa l
esaswell
as50per
cent
ofFebrua
rysal
es.
Feb
ruary
’sacco
unts( P186,
000x0.5) P9 3,
000
Mar
ch’ssal
es 217,
000
Out
sta
n d
ingacco
untsrecei
vab
le,
Ma rc
h31 P310,
000

43
. Answer
:A
Cur
rent
uni
tco
stp
er1
,00
0
Mat
eri
al P5
2
La
bor 2
0
Over
head 1
0
Total P8
2

Eff
ecti
veJ
anuar
y1,20
07,th
epr
ic
eofmat
eri
al
swi
ll
ber
ais
edtoP60
.Th euni
tcos
tfo
r2 0
07prod
uct
ionwi
l
lbeP90.
Si
n cet
hesal
esofJ
anuar
yandF
ebru
aryc
omefr
omDec
emberpr
odu
cti
on,o
nlyt
heMarchsal
eswi
llh
aveco
stofP9
0
pertho
usa
nd.

Ja
nuarya
ndF e
brua
rycost
ofgoo
dss
old (
1,
700+1
,200)xP8
2 P2
37,
800
Marc
h 1,
400xP90 1
26,
000
Cost
ofgood
ssold(
fi
rst
quar
te
r) P3
63,
800

44
. An
swe
r:A
Janua
ryF e
bruar
yMarch
Ca shcol
lec
ti
ons203,
750248,
000224,
750Cashdi
sburs
ements Payment
sfor
materi
als
93,6
0084,
0 00120
,000L aborexpens
es28,
00040,
00050,
000 Ov e
rhead14,
00020,
00025
,000 Sel
li
ng&
admini
st
ra
ti
ve52,
70 03
7,200
43,40
0I nt
eres
t8,
000T axes
64,560 Di
vide
nds . .4 8,
420 T ot
al
di
sburs
emen t
s188,
300181,
200359,380 NetCashI
nfl
ow( Out
fl
ow)15,
45066,
800(1
34,63
0)CashBal
ance,
Begi
nni
ng30,
000 2
5,00025,
000Cumul
ati
vecashbal
ance45,
4509 1
,800(
109,
630)
Ma r
ket
abl
e
secur
it
ies20
,4506
6,800(87,
250) Cumu l
ati
veMS2 0,
45087,
250Bor
rowin
gs 0 04 7,
380CashBal
ance,
End25,
000112,
25025,
000
45
. An swer:C
Pr
of
o r
maIn c
o meStat
ement
J
anu
aryFebr
u ar
yMarchTo
tal
Sales263
,5001
86,000217,
000666,
500Cost
o f
goodssold
139,4009
8,400
126,0
00363,
800Gros
s
profi
t
1 2
4,100
87,60
091 ,
000302,
700Sel
li
ngexpens
es,20%52,700
3 7
,2004
3,400
133,30
0Operat
i
ng
i
ncome71,
40050,40047,
600169
,400
Int
ereste
xpense2,
6672,
6672,
6668,
000In
comeb e
for
e
tax
6 8
,73347,
73344,
9341 6
1,400
Inco
met ax,40%27,
49319,
09317,
97464,
560Netinc
ome 41
,2402
8,6402
6,960
96,
840
46
. An swer:A
Augustsal
es
Bil
led8/20 P350,000x18% P63 ,
000

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Bil
l
ed9/1
0 P35
0,0
00x8
0%x9
8% 2
74,
400
Co
ll
ect
io
nsinSe
pto
fAu
gsal
es P3
37,
400

47
. Answe
r:B
Russ
onpro
vid
es25per
cen
tof
nextmo
nth
’sq
uan
ti
tys
ale
s.
25
%xP4 00,
000x80
%=P8 0,
000

48
. Answer
:D
Maysale
sb i
l
ledJu
ne1
025
0,0
00x18
% P4
5,0
00
Ju
neSa l
es:
Bil
le
dJ u
ne2 0 300,0
00x18
% 54,
000
Bil
le
dJ u
ly10 3
00,00
0x.80z.
98 2
35,
200
Ju
lysal
es
Bil
le
dJ u
ly20 P3
50,00
0x.80x.
98 P2
74,
400
Ju
lyColl
ect
io
ns P6
08,
600

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