Chapter 20: Master Budgets and Performance Planning

The first step in preparing the master budget is planning the ... budget.

Sales

LA Company has a beginning cash balance of $6,000, cash receipts of $12,000, cash payments of $7,200 and an outstanding loan balance of $1,500. Their preliminary cash balance is ...

$10800

A manufacturing company has budgeted direct labor hours of 600 at a variable overhead rate per direct labor hour of $20. The budgeted fixed cost is $500 per month. The total budgeted overhead cost will be ...

$12500

A company expects to sell 400 units of Product X in January and expects sales to increase by 10% per month. If Product X sells for $10 each, the total sales for the first quarter of the year will be $

$13240

A manufacturing company has budgeted direct labor hours of 940 at a budgeted direct labor hour rate of $15. The budgeted fixed cost is $950 per month. The total budgeted overhead cost will be ...

$15050

A manufacturing company's sales budget indicates the following sales: January: $30,000; February: $20,000; March: $15,000. The company expects 80% of the sales to be on account. Credit sales are collected 30% in the month of the sale and 70% in the month following the sale. The total cash receipts collected during March will be ...

$17800

HN Company had a beginning cash balance of $50,000; cash payments of $15,000 and a loan balance with the bank of $7,000. If HN has an agreement with the bank that they will maintain a minimum cash balance of $30,000, their ending cash balance is ...

$30,000

A manufacturing company's sales budget indicates the following sales: January: $25,000; February: $30,000; March: $35,000. The company expects 70% of the sales to be on account and the remainder to be cash sales. Credit sales are collected in the month following the sale. The total cash collected during March will be ...

$31500

If direct materials per unit are $20, direct labor per unit is $10, variable overhead per unit is $2, and fixed overhead per unit is $1, total product cost per unit is ...

$33

A manufacturing company has units to produce of 940 units for the month. Each unit requires 3.5 hours of labor to produce. The cost of direct labor is $15 per hour. The total cost of direct labor for the month will be ...

$49350

A merchandising company's budget includes the following data for January: Sales: $400,000; COGS: $270,000; Administrative salaries: $1,250; Sales commissions: 5% of sales; Advertising: $10,000; Depreciation on store equipment: $25,000; Rent on administrative building: $30,000; Miscellaneous administrative expenses: $5,000. The total general and administrative expenses on the January general and administrative expense budget will be ...

$61250

A company budgets the following direct materials purchases: April: $70,000; May $90,000; June: $60,000. All purchases are on account and the company pays 25% of purchases in the month of the purchase and the remaining amount in the following month. Cash payments for June for direct materials is ...

$82500

A company has the following loan activity—Additional loan from bank: $19,000; Ending cash balance: $5,600. The preliminary cash balance is:

($13,400)

A manufacturing company has budgeted production of 5,000 units for May and 4,400 units in June. Each unit requires 3 pounds of materials at a cost of $10 per pound. On May 1, there are 2,750 pounds of materials on hand. The company desires an ending materials inventory of 60% of the next month's materials requirements. The total cost of direct materials purchases for May will be ...

201700

A company's sales budget indicates the following sales: January: 25,000; February: 30,000; March: 35,000. Beginning inventory is 12,000 units and the company desires ending inventory of 45% of the next month's sales. Units to be produced in January will be...

26500

A company expects to sell 500 units during the second quarter and 550 units in the third quarter. Currently, during the second quarter, they have 46 units in beginning inventory. If they desire ending inventory of 10% of the next quarter's sales, ... units will need to be produced in the second quarter.

509

A company has the following budgeted information: Cash receipts: $542,000; Beginning cash balance: $10,000; Cash payments (including interest payments): $560,000; Outstanding loan balance: $100,000; Desired ending cash balance: $50,000. In order to maintain the desired cash balance, the company will need to:

Borrow $58,000

The budget which shows predicted amounts of the company's assets, liabilities, and equity as of the end of the budget period is the:

Budgeted Balance Sheet

A ... budget is continually revised as time as time passes.

Continuous

The ... function requires that management evaluate operations against some norm.

Control

Budgeted performance considers all of the following in relation to a benchmark: (Select all that apply).

Economic Factors, Company Factors, and Industry Factors

The primary purpose of using short-term budgets is to:

Evaluate performance and take necessary corrective action.

A manufacturing company would typically prepare all of the following budgets except:

Merchandise Inventory Budget

A manufacturer will prepare a ... budget which shows the number of units to be produced during a period.

Production

Which of the following items would be included on the capital expenditures budget? (Check all that apply.)

Sale of plant assets and plant asset purchases.

True or false: A production budget is unique in that it does not show costs; it is always expressed in units of product.

True

True or false: Depreciation on non-manufacturing assets and property taxes are considered general and administrative expenses and, therefore, are included on the general and administrative expense budget.

True

The formula to compute the budgeted direct labor cost is

Units to produce x direct labor hours required per unit x direct labor cost per hour = Cost of direct labor.

The formula to determine the materials to be purchased is ...

Units to produce x materials required per unit + desired ending materials inventory - beginning materials inventory = materials to be purchased.

ABC Company prepared a cash budget for the month. The company has outstanding loans and desires a minimum cash balance of $10,000. If the company has a preliminary cash balance of $25,000, the company should:

Use $15,000 to repay loans

The reporting of expected cash receipts and cash payments related to the sale and purchase of plant assets is reported on the ... expenditures budget.

capital

Direct materials are $15 per unit; direct labor is $7 per unit and variable overhead costs are $2 per unit. If total product costs are $27, what are fixed costs per unit?

$3

List the individual budgets of the master budget in the order in which they are prepared, with the first on top.

1. Sales Budget 2. Production budget 3. Direct Materials, Direct Labor, and Factory Overhead Budgets 4. Cash Budgets