ACC256 Chapter 9 DSM
The Paper Mill expects to sell 6,000 reams of paper in October and 8,000 in November for $6 each. What is the total sales revenue for the sales budget during October and November?
$36,000 October; $48,000 November
Which of the following is NOT important to a manager at a merchandising company when preparing the master budget?
The production budget
Which of the following is NOT an outcome of the combined cash budget?
Total liabilities and stockholders' equity
Which of the following is NOT true about credit card sales and budgets?
A sale is shown on the operating expense budget, two months after the sale.
Which of the following is a benefit of budgeting which helps a manager motivate employees and evaluate performance?
Benchmarking
Which of the following budgets reveal a manager's intent to invest in new property, plant, or equipment?
Capital expenditure budget
________ entails the planning and establishment of long-term goals which range years into the future.
Strategic planning
Which of the following is a benefit to a merchant who accepts credit and debit card transactions?
The acceptance of credit cards increases the speed of cash flows.
Which of the following is important to a manager at a merchandising company when preparing the master budget?
The length of time between sales and deposits
The ________ merges the budgeted cash collections and cash payments to project the firm's ending cash position.
combined cash budget
A merchandising company uses a master budget which includes a ________.
cost of goods sold
A manager can project the collection of cash and forecast an organization's budgeted balance sheet by using a(n) ________.
financial budget
Safety stock is ________.
inventory kept on hand to account for increases in consumer demand
A line of credit ________.
is a lending tool the company can use to draw money as needed at a specified rate of interest, for a specified amount of time, paying on the actual amount owed instead of a closed-end note
A ________ is a lending tool the company can use to draw money as needed at a specified rate of interest, for a specified amount of time, paying on the actual amount owed instead of a closed-end note.
line of credit
Benchmarking ________.
may help a manager motivate employees and provide a measure to evaluate performance
Capital expenditure budgets ________.
reveal a manager's intent to invest in new property, plant, or equipment
Inventory kept on hand to account for increases in consumer demand or machine malfunction in case of emergency is ________.
safety stock
Expected Number of Unit Sales × Expected Sales Price per Unit = Expected Total Sales Revenue is the computation for ________.
sales revenue
A budget ________.
should force a manager to plan, promote coordination, communication, and provide a benchmark for motivation employees and evaluation actual performance.
Actual or prior year budgeted data is ________.
the starting point for creating the budget
The characteristics of a third-party credit card include each of the following EXCEPT ________.
there are no third-party transaction fees
Units Needed for Sales + Desired Ending Inventory - Units in Beginning Inventory is the formula to compute ________.
units to produce
The managerial accountant at Monumental Industries reported an upcoming sale of desks. Each desk requires .60 direct labor hours to produce. Monumental has a direct labor rate of $14 per direct labor hour to produce the product. The managerial accountant reported that the production budget indicates that the production schedule consists of 800 desks in January and 1,000 desks in February. What is the total direct labor budgeted cost together for January and February?
$15,120
Monumental Industries manufactures desks. Each desk requires .30 direct labor hours to produce. Monumental has a direct labor rate of $12 per direct labor hour. The managerial accountant reported that the production budget indicates that the production schedule consists of 800 desks in September and 900 desks in October. What is the total direct labor budgeted cost together for September and October?
$6,120
Customer World provides products and services to customers and allows customers to pay by credit card. On Thursday, a customer purchased a computer for $600 and used a credit card to pay. The credit card company charges Computer World a transaction fee equal to $0.20 + 1% of the total charge. What is the transaction fee Customer World must pay on this sale?
$6.20
The managerial accountant at Hill's Development Services expects to collect 30% of its credit sales in the month after the sale and 40% two months after the sale. Assume credit sales in December were $100,000 and November sales were $90,000. November credit sales $90,000 December credit sales $100,000 What is the anticipated cash collection of credit sales for January?
$66,000
Customer World expects the credit card company to deposit funds in their business account for their sales where a customer uses a credit card to pay. If Customer World earned $90 from a sale and the transaction fee was $1.25, how much should Customer World expect the credit card company to deposit into their business account?
$88.75
Which of the following is NOT a component of the combined cash budget?
Depreciation as a cash expense
The computation for sales revenue is ________.
Expected Number of Unit Sales × Expected Sales Price per Unit
What budget is the comprehensive planning document for the entire organization?
Master Budget
Which of the following is TRUE about a service company?
The operating budget of a service company has no merchandising inventory.
Which of the following represents the formula to compute the total units to produce in the production budget?
Units Needed for Sales + Desired Ending Inventory - Units in Beginning Inventory
The formula to compute the direct labor budget is ________.
Units to be Produced × Direct Labor per Unit × Direct Labor Cost per Hour = Total Direct Labor Cost
Which of the following is TRUE about credit card sales and budgets?
A sale is shown on the sales budget, in the same month as the sale.