Accounting 4B DSM Ch. 9 - Master Budget

The Paper Mill expects to sell 9,000 reams of paper in November and 12,000 in December for $5 each. What is the total sales revenue for the sales budget during October and November?

$45,000 in November and $60,000 in December

Customer World provides services to customers and allows customers to pay by credit card. On Thursday, a customer purchased a case of flash drives for $65 and used a credit card to pay. The credit card company charges Computer World a transaction fee equal to $0.25 + 2% of the total charge. What is the transaction fee Customer World must pay on this sale?

65 x .02= 1.3 + .25 = 1.55

Which of the following answers describes the benefits of the financial budget?

A manager who uses this budget can compile the capital expenditure budget, the cash budget, and the budgeted balance sheet.

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.

Which of the following budgets reveal a manager's intent to invest in new property, plant, or equipment?

Capital expenditure budget

A merchandising company uses a master budget which includes a ________.

Cost of Goods Sold

Which of the following is NOT a component of the direct labor budget?

Cost of goods sold

What value has been entered in the forecast forward period within the Format Trendline dialogue box

The Excel "forecast forward" feature visually shows what will happen if the relationship between a predictor variable (x = coupons) and outcome variable (y = coffee sales) continues to hold at higher volumes. Since the highest data point appears at roughly the 200 coupon point on the x-axis, it appears that 100 has been entered in the forecast forward period within the Format Trendline dialog box. This would extend the line from 200 coupons to 300 coupons.

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 starting point for creating the budget is ________.

actual or prior year budgeted data

A merchandising company uses a master budget which includes all of the following EXCEPT a(n) ________.

direct labor budget

Strategic planning ________.

entails the planning and establishment of long-term goals which extend years into the future

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

The master budget ________.

is the comprehensive planning document for the entire organization

When using the INTERCEPT function in Excel, what data is required?

known or existing x-axis and y-axis values

Benchmarking ________.

may help a manager motivate employees and provide a measure to evaluate performance

The combined cash budget ________.

merges budgeted cash collections and cash payments to project the firm's ending cash position

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

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?

$12*.30=3.6 3.6*800= 2880 3.6*900=3240 2880+3240=$6120

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

You have prepared the scatterplot and trendline above from the data provided. Although you can use the graph to predict sales volume for 250 coupons, which Excel function will be most helpful in developing an exact value?

Forecast.linear

Which Excel function will predict the point at which a regression line crosses the y-axis?

Intercept

In the scatterplot above, the line passing through the data points is known as the ________.

Linear Trendline

The managerial accountant at Local Produce Services expects to collect 40% of its credit sales in the month after the sale and 60% two months after the sale. Assume credit sales in January were $200,000 and February sales were $100,000. January credit sales $200,000 February credit sales $100,000 What is the anticipated cash collection of credit sales in March from January and February sales?

The anticipated cash collections of January and February credit sales in March is $160,000. The other answers are not correct. January: 60% × $200,000 = $120,000 February: 40% × $100,000 = $40,000 $120,000 + $40,000 = $160,000

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 is NOT important to a manager at a merchandising company when preparing the master budget?

The production budget

Units Needed for Sales + Desired Ending Inventory - Units in Beginning Inventory is the formula to compute ________.

Units to produce