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Exam 20: Budgetary Planning

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Question 31

Multiple Choice

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The following information was taken from Southgate Industry's cash budget for the month of July: $\begin{array} { l r } \text { Beginning cash balance } & \$ 480,000 \\\text { Cash receipts } & 304,000 \\\text { Cash disbursements } & 544,000\end{array}$ If the company has a policy of maintaining a minimum end of the month cash balance of $400,000, the amount the company would have to borrow is

A) $160,000.
B) $80,000.
C) $240,000.
D) $96,000.

E) None of the above
F) All of the above

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Question 32

Multiple Choice

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Petal Co. reported the following information for 2016: -All sales are on credit. -Customer amounts on account are collected 50% in the month of sale and 50% in the following month. How much is the November 30, 2016 budgeted Accounts Receivable?

A) $900,000
B) $540,000
C) $465,000
D) $435,000

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

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Question 33

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Orange Co. is a manufacturer and Pineapple Company is a merchandiser. What is the difference in the budgets the two entities will prepare?

The single most important output in preparing financial budgets is the

Astor Manufacturing has the following budgeted sales: January $120,000, February $180,000, and March $150,000. 40% of the sales are for cash and 60% are on credit. For the credit sales, 50% are collected in the month of sale, and 50% the next month. The total expected cash receipts during March are:

Dolce Co. estimates its sales at 180,000 units in the first quarter and that sales will increase by 18,000 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

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

Budgeted Income Statement

The budget itself and the administration of the budget are entirely accounting responsibilities.

Budgeting in not-for-profit organizations

The master budget reflects management's long-term plans encompassing five years or more.

The most common budget period is

The manufacturing overhead budget shows the expected manufacturing overhead costs.

Teller Co. is planning to sell 900 boxes of ceramic tile, with production estimated at 870 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Teller has 3,900 pounds of clay mix in beginning inventory and wants to have 4,500 pounds in ending inventory. What is the total amount to be budgeted for manufacturing overhead for the month?

Kam Department Store reported the following information for 2016: All sales are on credit. - 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?

Accounting generally has the responsibility for

The budget itself and the administration of the budget are the responsibility of the accounting department.

Which is the last step in developing the master budget?

The starting point in preparing a master budget is the preparation of the

A budget can be used as a basis for evaluating performance.