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Exam 8: Master Budgeting

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Question 151

Multiple Choice

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Gusler Corporation makes one product and has provided the following information: The estimated cost of goods sold for May is closest to:

A) $807,500
B) $256,500
C) $646,000
D) $551,000

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Question 152

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The production budget is typically prepared prior to the sales budget.

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Question 153

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The LaGrange Corporation had the following budgeted sales for the first half of the current year: The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled:Collections on sales:60% in month of sale30% in month following sale10% in second month following saleThe accounts receivable balance on January 1 of the current year was $70,000, of which $50,000 represents uncollected December sales and $20,000 represents uncollected November sales.The total cash collected during January by LaGrange Corporation would be:

Sparks Corporation has a cash balance of $17,700 on April 1. The company must maintain a minimum cash balance of $14,500. During April, expected cash receipts are $65,000. Cash disbursements during the month are expected to total $77,500. Ignoring interest payments, during April the company will need to borrow: