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Exam 6: Budgeting

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Question 81

Multiple Choice

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A series of budgets for varying rates of activity is termed an

A) flexible budget
B) variable budget
C) master budget
D) activity budget

E) A) and C)
F) C) and D)

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Question 82

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Budgets are prepared in the Accounting Department and monitored by various department managers.

A) True
B) False

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Question 83

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To meet projected annual sales, Bluegill Manufacturers, Inc.needs to produce 75,000 machines for the year.The estimated January 1 inventory is 7,000 units, and the desired December 31 inventory is 12,000 units.What are projected sales units for the year?

What is the budgeted unit of production for March?

Prepare a flexible budget for Cedar Jeans Company using production levels of 16,000, 18,000, and 20,000 units produced.The following is additional information necessary to complete the budget: Variable costs: Direct labor $6.00 per unit Direct materials $8.00 per unit Variable manufacturing costs $2.50 per unit Fixed costs: Supervisor's salaries $80,000 Rent 12,000 Depreciation on equipment 24,000

The objectives of budgeting are 1 establishing specific goals for future operations, 2 executing plans to achieve the goals, and 3 periodically comparing actual results with these goals.

Supervisor salaries and indirect factory wages would normally appear in the direct labor cost budget.

Production and sales estimates for March for the Robin Co.are as follows: The number of units expected to be manufactured in March is

When budget goals are set too tight, the budget becomes less effective as a tool for planning and controlling operations.

If Division Inc.expects to sell 200,000 units in the current year, desires ending inventory of 24,000 units, and has 22,000 units on hand as of the beginning of the year, the budgeted volume of production for the year is 202,000 units.

The flexible budget is, in effect, a series of static budgets for different levels of activity.

The total direct materials purchases assuming no beginning or ending inventory of material of Materials A and B required for August production is

Match each phrase that follows with the term a-e it describes. -integrated set of operating and financing budgets for a period of time

The cash collections expected in September from accounts receivable are estimated to be

Match each phrase that follows with the term a-e it describes. -occurs when budgets are too loose

The budgeting process is used to effectively communicate planned expectations regarding profits and expenses to the entire organization.

As of January 1 of the current year, the Grackle Company had accounts receivables of $50,000.The sales for January, February, and March were as follows: $120,000, $140,000, and $150,000, respectively.Of each month's sales, 20% are for cash.Of the remaining 80% the credit sales, 60% are collected in the month of sale, with the remaining 40% collected in the following month.What is the total cash collected both from accounts receivable and cash sales in the month of March?

The master budget of a small manufacturer would normally include all necessary component budgets except the budgeted balance sheet.

Budgetary slack can be avoided if lower and mid-level managers are requested to support all of their spending requirements with specific operational plans.

Rodger's Cabinet Manufacturers uses flexible budgets that are based on the following manufacturing data for the month of July: Direct materials $8 per unit Direct labor $5 per unit Electric power variable $0.30 per unit Electric power fixed $4,000 per month Supervisor salaries $25,000 per month Property taxes on factory $4,000 per month Straight-line depreciation $2,900 per month Prepare a flexible budget for Rodger's based on production of 10,000, 15,000, and 20,000 units.