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Exam 23: Budgetary Planning

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Question 21

True/False

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The budgeted balance sheet is prepared entirely from the budgets for the current year.

A) True
B) False

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Question 22

Multiple Choice

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What is the proper preparation sequencing of the following budgets? 1) Budgeted Balance Sheet 2) Sales Budget 3) Selling and Administrative Budget 4) Budgeted Income Statement

A) 1 2 3 4
B) 2 3 1 4
C) 2 3 4 1
D) 2 4 1 3

E) A) and B)
F) A) and C)

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Question 23

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A __________________ is responsible for coordinating the preparation of the budget in many companies.

The direct materials and direct labor budgets provide information for preparing the

Kam Department Store reported the following information for 2016: $\quad \quad \quad \quad \quad \quad \quad \quad \text { October } \quad \text { November } \quad \quad \text { December }$ $\text { Budgeted sales } \quad \$ 1,240,000 \quad \$ 1,160,000 \quad \$ 1,440,000$ All sales are on credit. $\bullet$ Customer amounts on account are collected 50% in the month of sale and 50% in the following month. How much cash will Kam receive in November?

Grey Company has 24000 units in beginning finished goods. If sales are expected to be 120000 units for the year and Grey desires ending finished goods of 30000 units how many units must the company produce?

The single most important output in preparing financial budgets is the

The direct materials budget must be completed before the production budget because the quantity of materials available for production must be known.

A master budget consists of

An appropriate activity index for a college or university for budgeting faculty positions would be the

Which of the following is not a financial budget?

If budgets are to be effective all of the following must be present except

Accounting generally has the responsibility for

Benet Company has budgeted the following unit sales: The finished goods inventory on hand on December 31 2015 was 21000 units. It is the company's policy to maintain a finished goods inventory at the end of each quarter equal to 20% of the next quarter's anticipated sales. Instructions Prepare a production budget for 2016.

A company's past experience indicates that 60% of its credit sales are collected in the month of sale 30% in the next month and 5% in the second month after the sale; the remainder is never collected. Budgeted credit sales were: $\begin{array} { l r } \text { January } & \$ 360,000 \\\text { February } & 216,000 \\\text { March } & 540,000\end{array}$ The cash inflow in the month of March is expected to be

A merchandiser has a merchandise purchases budget rather than a production budget.

Which is the last step in developing the master budget?

Dolce Co. estimates its sales at 180000 units in the first quarter and that sales will increase by 18000 units each quarter over the year. They have and desire a 25% ending inventory of finished goods. Each unit sells for $25. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale. Cash collections for the third quarter are budgeted at

Financial planning models and statistical and mathematical techniques may be used in forecasting sales.

A common starting point in the budgeting process is