Chapter 8 Smartbook A306

Accounts Receivable

Amounts to be received in the future due to the sale of goods or services

on the cash budget, what is subtracted from total cash available to find the excess of deficiency

cash disbursements

the direct materials budget directly relies on the ___ budget a. merchandise purchases b. direct labor c. sales d. production

d. production

All costs of production other than direct materials and direct labor are shown on the ______ budget.

manufacturing overhead budget

A number of separate, but interdependent, budgets that formally lay out the company's sales, production, and financial goals are contained in the ____ budget

master

the budgeted income statement does NOT rely on information from the ____ budget

production

What is NOT used to prepare the cash budget

production budget is not used

equation for total sales on the sales budget

budgeted sales in units x sales price per unit

which of the following is NOT one of the ways price and quantity are determined for the Revenue Budget? a. competitors price b. current events - politically and legally c. projected raw materials and direct labor costs d. historic sales levels and trends

c. projected raw materials and direct labor costs reason: these are fir the DM/Dl budget

S&P Enterprises has scheduled direct material purchases of $100,000 in January, $130,000 in February and $150,000 in March. The company pays for 75% of its purchases in the month of purchase and 25% the month after the purchase. Calculate the expected cash disbursements for the month of February.

$122,500 reason: feb purchases ($130,000 x 0.75) + jan purchases ($100,000 x 0.25) = 97,500 + 25,000 = 122,500

Madison Corporation's expected beginning cash balance is $35,000. Cash collections are budgeted at $50,000 and cash disbursements are estimated to be $80,000. The minimum required cash balance is $20,000 and the company can borrow as much as needed in increments of $10,000.

$25,000 reason: 35,000 + 50,000 - 80,000 = 5,000 --> they can borrow in increments of 10,000 they must borrow 20,000 to meet or exceed the minimum cash balance.... making ending balance 25,000

The final schedule of the master budget is the ___

budget balance sheet

Given budgeted sales of 10,000 units; desired ending inventory of 5,000 units, and beginning inventory of 2,000 units, production is ____ units

13,000 reason: 10,000 + 5,000 - 2,000 = 13,000 sales + end inv - beg inv = required production

ABC, Inc;s expected sales for the first six months of the year are: Jan = 12,000 Feb = 15,000 Mar = 16,000 Apr = 20,000 May = 22,000 Jun = 25,000 if desired ending inv is 25% of next month's sales, the number of units to be produced in march is ?

17,000 reason: march sales + end inv. (25% of April sale) - beg inv. (25% of march sale) 16,000 + 5,000 - 4,000 = 17,000

The case budget ___ a. uses information from the budgeted balance sheet and income statement b. is the first budget prepared in the master budget c. is prepared near the end of the master budget process

C. is prepared near the end of the master budget process

the receipts section of the cash budget lists

all cash inflows, expect from financing

Which does the Master budget schedules: a. may be prepared in any order b. answer several key questions for a company c. are based on estimated and assumptions

b. answer several key questions for a company c. are based on estimated and assumptions

Which of the following budgets are directly based on information from the sales budget? a. direct labor budget b. production budget c. direct materials budget d. selling and admin expense budget

b. production budget d. selling and admin expense budget

Because it is needed for the schedule of expected cash collections, the annual master budget file includes the _____ _____

balance sheet

To prepare a budgeted balance sheet as of December 31, 2023, data is needed from the ______ December 31, 2022.

balance sheet as of

what is the correct order of events in creating the cash budget in a master budget

record beginning cash balance, and and answer questions, calculate cash inflows and outflows, excess (deficiency), calculate financing needs (if needed), determine ending cash balance