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Exam 23: Master Budgets and Planning

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Question 31

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Describe at least five benefits of budgeting.

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Benefits of budgeting are:
(1) Budgeting...

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Question 32

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A plan that lists the types and amounts of selling expenses expected during the budget period is called a(n) :

A) Sales budget.
B) Operating budget.
C) Capital expenditures budget.
D) Selling expense budget.
E) Purchases budget.

F) B) and C)
G) A) and E)

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Question 33

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A managerial accounting report that presents predicted amounts of the company's assets, liabilities, and equity as of the end of the budget period is called a(n) :

Financial budgets are normally completed after preparation of operating and capital expenditure budgets.

A company's history indicates that 20% of its sales are for cash and the rest are on credit. Collections on credit sales are 30% in the month of the sale, 50% in the next month, and 15% the following month. Projected sales for January, February, and March are $60,000, $85,000 and $95,000, respectively. The March expected cash receipts from all current and prior credit sales is:

Which of the following budgets is not an operating budget?

There are three major subgroups of the master budget. These are _______________________, __________________, and ______________________.

Lara Company's budget includes the following credit sales for the current year: September, $25,000; October, $36,000; November, $30,000; December, $32,000. Experience has shown that payment for the credit sales is received as follows: 15% in the month of sale, 60% in the first month after sale, 20% in the second month after sale, and 5% is uncollectible. How much cash can Lara Company expect to collect in November as a result of current and past credit sales?

The usual starting point for preparing a master budget is forecasting or estimating:

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:

Assuming a bottom-up process of budget development, which of the following should be initially responsible for developing sales estimates?

The usual budget period is:

Production budgets should always show both budgeted units of product and costs.

A master budget refers to a company's sales budget that includes all of its segments or departments.

___________________________ is a budget system based on expected activities and their levels that enables management to plan for resources required to perform the activities.

A capital expenditures budget is prepared before the operating budgets.

Airtex Company budgeted the following credit sales during the current year: September, $90,000; October, $123,000; November, $105,000; December, $111,000. Experience has shown that cash from credit sales is received as follows: 10% in the month of sale, 50% in the first month after sale, 35% in the second month after sale, and 5% is uncollectible. How much cash should Airtex Company expect to collect in November from all current and past credit sales?

The master budget is a small component of the comprehensive budget.

A plan that shows the expected cash inflows and cash outflows during the budget period, including receipts from loans needed to maintain a minimum cash balance and repayments of such loans, is called a(n) :

Del Carpio, Inc., sells two products, Widgets and Gadgets. The sales forecast in units for the first quarter of the coming year is: Cash sales are 30% of each product's monthly sales. The remaining sales are credit sales which are collected as follows: 70% in the month of sale, 20% the next month, and 10% in the following month. Unit sale prices are $30 and $20 for Widgets and Gadgets, respectively. Determine the company's cash receipts for March from its current and past sales.