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Exam 20: Master Budgets and Performance Planning

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Question 71

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Barrett's Fashions forecasts sales of $125,000 for the quarter ended December 31.Its gross profit rate is 20% of sales,and its September 30 inventory is $32,500.If the December 31 inventory is targeted at $41,500,budgeted purchases for the fourth quarter should be:

A) $134,000
B) $109,000
C) $91,500
D) $25,000
E) $91,000

F) A) and B)
G) All of the above

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Question 72

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What is a merchandise purchases budget? How is the merchandise purchases budget constructed?

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A merchandise purchases budget is used t...

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Question 73

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Northern Company is preparing a cash budget for June.The company has $12,000 cash at the beginning of June and anticipates $30,000 in cash receipts and $34,500 in cash disbursements during June.Northern Company has an agreement with its bank to maintain a cash balance of at least $10,000.As of May 31,the company owes $15,000 to the bank.To maintain the $10,000 required balance,during June the company must:

A plan that shows the predicted costs for direct materials,direct labor,and overhead to be incurred in manufacturing the units in the production budget is called the:

Which of the following statements about budgeting is false?

Which of the following factors is least likely to be considered in preparing a sales budget?

Blaircraft Company manufactures a product that requires five pounds of raw material for each unit produced.For the next year,beginning inventory of raw materials is 8,000 pounds.The raw materials inventory at the end of each quarter should be 15% of the next quarter's raw materials needed for production.Given the projected production in units below,what is the quantity of raw materials that needs to be purchased for the third quarter? $\begin{array} { l l l l l } \text { Quarter } & 1 & 2 & 3 & 4 \\\text { Expected production } & 7,00 & 5,00 & 8,00 & 6,00 \\\text { Units } & 0 & 0 & 0 & 0\end{array}$

Traditional budgeting is generally better than activity-based budgeting when attempting to reduce costs by eliminating nonvalue-added activities.

In preparing a budgeted balance sheet,the amount for Accounts Receivable is primarily determined from:

The task of preparing a budget should be the sole task of the most important department in an organization.

Preparing a master budget is usually the responsibility of:

What is a manufacturing budget?

The __________________________ shows expected cash inflows and outflows during the budget period.

A plan that lists the types and amounts of general and administrative expenses expected during the budget period is referred to as a:

A June sales forecast projects that 6,000 units are going to be sold at a price of $10.50 per unit.The desired ending inventory of units is 15% higher than the beginning inventory of 1,000 units.Merchandise purchases for June are projected to include how many units?

A budget is a formal statement of future plans,usually expressed in monetary terms.

Operating budgets include all the following budgets except the:

Which of the following budgets is not an operating budget?

Budget preparation is best determined in a top-down managerial approach.

The process of evaluating performance can be improved by using budgets.