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Exam 9: The Master Budget

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Question 51

Multiple Choice

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Goddard's Department Store has budgeted cost of goods sold of $44,000 for its men's shorts in March. Management also wants to have $8000 of men's shorts in inventory at the end of March to prepare for the summer season. Beginning inventory of men's shorts for March is expected to be $4600. What dollar amount of men's shorts should be purchased in March?

A) $47,400
B) $40,600
C) $56,600
D) $31,400

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Question 52

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BusyBody Company expects its November sales to be 25% higher than its October sales of $240,000. Purchases were $100,000 in October and are expected to be $100,000 in November. All sales are on credit and are collected as follows: 35% in the month of the sale and 60% in the following month. Purchases are paid 35% in the month of purchase and 65% in the following month. The cash balance on November 1 is $13,500. The cash balance on November 30 will be

A) $262,500
B) $149,000
C) $162,500
D) $135,500

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Question 53

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All of the following budgets are prepared by merchandising companies except

Wriston Company is preparing its cash budget for the upcoming month. The beginning cash balance for the month is expected to be $15,000. Budgeted cash disbursements are $72,500, while budgeted cash receipts are $89,600. Wriston Company wants to have an ending cash balance of $30,000. The excess (deficiency) of cash available over disbursements for the month would be

DogDayz Company has two products: Doggyz and Pupz. A March sales forecast projects 15,000 units of Doggyz and 20,000 units of Pupz are going to be sold at prices of $13.50 and $19.00, respectively. The desired ending inventory of Doggyz is 16% higher than the beginning inventory, which was 1000 units. How much are total March sales for Doggyz anticipated to be?

The master budget is the set of budgeted financial statements and supporting schedules in the entire organization.

A combined cash budget includes all of the following except

Which of the following is NOT a benefit of budgeting?

A lamp store purchased $3600 of lamps in September. The store had $1400 of lamps on hand at the beginning of September, and expected to have $1600 of lamps at the end of September to cover part of anticipated October sales. What is the budgeted cost of goods sold for September?

Mighty Corporation manufactures end tables. Each end table requires .50 direct labor hours in its production. Mighty Corporation has a direct labor rate of $13 per direct labor hour. The production budget shows that Mighty Corporation plans to produce 600 end tables in March and 1100 end tables in April. What is the total combined direct labor cost that Mighty Corporation should budget in March and April?

Budget committees include all of the following people except

The ________ budget is a component in an operating budget.

McEwen Company has budgeted the following credit sales during the last four months of the year: September, $14,000; October, $20,000; November $16,000; December, $33,000. Experience has shown that payment for the credit sales is received as follows: 30% in the month of sale, 55% in the first month after sale, 10% in the second month after sale, and 5% uncollectible. How much cash can McEwen Company expect to collect in November as a result of credit sales?

Lough Company prepared the following purchases budget: All purchases are paid for as follows: 10% two months after purchase, 60% in the following month, and 30% in the month of purchase. What are the cash disbursements in August to account for the June purchases at Lough Company?

Lough Company prepared the following purchases budget: All purchases are paid for as follows: 25% two months after purchase, 45% in the following month, and 30% in the month of purchase. What are the total cash disbursements in October to account for the purchase of merchandise at Lough Company?

The manager at a service company does not prepare a cash budget.

Bookworm Publishers publishes books and they have gathered the following data for the month of October: Bookworm Publishers requires an ending cash balance of at least $5,000 and can borrow from a line of credit in $1,000 increments. How much cash does Bookworm Publishers need to borrow for October?

Sam's Toys budgeted sales of $300,000 for the month of November and cost of goods sold equal to 60% of sales. Beginning inventory for November was $55,000 and ending inventory for November is estimated at $54,000. How much are the budgeted purchases for November?

Management uses budgets to express its plans and to assess how well the organization meets or exceeds its goals.

The financial budget projects the collection and payment, of cash, and the forecast of the company's budgeted balance sheet.