ACCT 202 ch 8

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. A)$130,000 B)$107,500 C)$122,500 D)$135,000

$122,500 Reason: February purchases ($130,000 x 75%) $97,500 + January purchases ($100,000 x 25%) $25,000 = $122,500.

Which of the following budgets are needed to calculate unit product costs? -Cash -Direct materials -Selling and administrative -Manufacturing overhead -Direct labor

-Direct materials -Manufacturing overhead -Direct labor

Which of the following budgets are directly based on information from the sales budget? -Production -Direct materials -Selling & administrative expense -Manufacturing overhead

-Production -Selling & administrative expense

Which of the following is needed to calculate raw materials to be purchased on the direct materials budget? -Budgeted unit sales -Raw materials required per unit -Beginning inventory of raw materials -Ending finished goods inventory

-Raw materials required per unit -Beginning inventory of raw materials

Borrowing money is required whenever ______. -the cash excess equals the minimum required cash balance -the cash excess is less than the minimum required cash balance -the cash excess is greater than the minimum required cash balance -there is a cash deficiency

-the cash excess is less than the minimum required cash balance -there is a cash deficiency

Given budgeted sales of 10,000 units, desired ending inventory of 5,000 units, and beginning inventory of 2,000 units, required production is ______ units. A)10,000 B)15,000 C)7,000 D)13,000

13,000 Reason: 10,000 + 5,000 - 2,000 = 13,000

What is added to the variable selling and administrative expenses to get the total selling and administrative expenses? A)Fixed selling and administrative expenses B)Non-cash selling and administrative expenses C)Direct materials D)Merchandise purchases

A)Fixed selling and administrative expenses

What is subtracted from total budgeted selling and administrative expenses to determine the cash disbursements for selling and administrative expenses? A)Non-cash expenses B)Ending finished goods inventory C)Manufacturing overhead D)Direct labor costs

A)Non-cash expenses

All costs of production other than direct materials and direct labor are shown on the ______ budget. A)manufacturing overhead B)cash C)merchandise purchases D)ending finished goods inventory

A)manufacturing overhead

Edison Corporation's variable manufacturing overhead rate is $5.00 per direct labor-hour. Total budgeted fixed overhead is $25,000 per month. The $25,000 per month includes $7,000 in depreciation expense. Total budgeted direct labor-hours for the month of July is 20,000. Based on the month of July only, the predetermined overhead rate is $______

Blank 1: 6.25

The number of working hours required to satisfy the production budget is shown on the ______ ______ budget.

Blank 1: direct Blank 2: labor or labour

In a manufacturing company, the ______ ______ budget details the raw materials that must be purchased to fulfill the production budget and to provide for adequate inventories

Blank 1: direct Blank 2: materials or material

In a manufacturing company, the _____ budget is prepared right after the sales budget.

Blank 1: production

ABC, Inc.'s expected sales for the first six month of the year are as follows. Month Expected Sales January $120,000 February $150,000 March $160,000 April $200,000 May $220,000 June $250,000 Experience has shown that 60% of sales are collected in the month of sale and 40% are collected the month after sale. Calculate expected cash collections for the month of April. Multiple choice question. A)$176,000 B)$200,000 C)$208,000 D)$184,000

D)$184,000 Reason: 40% of March sales ($64,000) + 60% of April sales ($120,000) = $184,000

In a manufacturing company, the ______ budget details the raw materials that must be purchased to fulfill the production budget and provide for adequate inventories A)sales B)production C)merchandise purchases D)direct materials

D)direct materials

The calculation of unit product cost requires information from the ______ budget A)cash B)selling and administrative C)ending finished goods inventory D)manufacturing overhead

D)manufacturing overhead

An integrated business plan that formally lays out the company's goals is called the ______ budget. A)master B)self-imposed C)sales D)profit planning

A)master

The first step in the budgeting process is preparing the ______ budget. A)sales B)cash C)direct materials D)production

A)sales

To calculate total sales on the sales budget, multiply budgeted sales in units by ______. A)sales price per unit B)number of units C)budgeted unit sales

A)sales price per unit

A company can repay outstanding principal and interest when ______. A)the cash excess is greater than the minimum required cash balance B)the cash excess equals the minimum required cash balance C)there is a cash deficiency D)the cash excess is less than the minimum required cash balance

A)the cash excess is greater than the minimum required cash balance

The ending finished goods inventory budget computes the cost of ______ units. A)unsold B)sold

A)unsold

Edison Corporation's variable manufacturing overhead rate is $5.00 per direct labor-hour. Total budgeted fixed overhead is $25,000 per month. The $25,000 per month includes $7,000 in depreciation expense. Total budgeted direct labor-hours for the month of July is 20,000. Budgeted cash disbursements for manufacturing overhead for July equals ______. A)$100,000 B)$118,000 C)$125,000 D)$132,000

B)$118,000

Sperling Company's master budget shows expected sales of 10,000 units and expected production of 11,000 units for the month of March. Each unit requires 1/2 hour of direct labor. The direct labor rate is $15.00 per hour. Calculate the expected total direct labor cost for the month of March. A)$150,000 B)$82,500 C)$75,000 D)$165,000

B)$82,500

In a manufacturing company, which budget is used as the basis for creating the direct materials budget, the direct labor budget, and the manufacturing overhead budget? A)Sales B)Production C)Finished goods inventory D)Cash

B)Production

To prepare a budgeted balance sheet as of December 31, 20x4, data is needed from the ______ December 31, 20x3. A)statement of cash flows for the year ended B)balance sheet as of C)income statement for the year ended

B)balance sheet as of

Working hours required to satisfy the production budget are shown on the ______ budget. A)cash B)direct labor C)direct materials D)merchandise purchases

B)direct labor

The cost of unsold units is computed on the ______ budget. A)production B)ending finished goods inventory C)sales D)manufacturing overhead

B)ending finished goods inventory

The first line of the direct labor budget consists of the budgeted units expected to be ______ during the period. A)sold B)produced

B)produced

The direct materials budget directly relies on the ______ budget. A)direct labor B)production C)merchandise purchases D)sales

B)production

Because all other parts of the budget depend on it, if the ______ budget is inaccurate, the rest of the budget will be inaccurate. A)cash B)sales C)production D)direct materials

B)sales

Budgeted expenses for areas other than manufacturing are shown on the ______ budget. A)manufacturing overhead B)selling and administrative C)ending finished goods inventory D)cash

B)selling and administrative

Variable selling and administrative expenses are calculated by multiplying the budgeted units ______ by the variable selling and administrative expense per unit. A)purchased B)sold C)produced

B)sold

Davidson Corporation's master budget shows expected direct labor cost of $90,000 for the month of May. During May, the company's expected sales equal 12,000 units and expected production is 15,000 units. If each unit requires 1/2 hour of direct labor, the budgeted direct labor rate is $ _____ per hour.

Blank 1: 12 or twelve

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

Blank 1: manufacturing or factory Blank 2: overhead

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

Blank 1: master, static, or planning

In a manufacturing company, the _____ budget shows the number of units that must be manufactured to satisfy sales needs and provide for the desired ending inventory.

Blank 1: production

In a manufacturing company, the budgets for manufacturing costs, including the direct materials budget, the direct labor budget, and the manufacturing overhead budget are all based on the _____ budget

Blank 1: production

Both the production and selling and administrative expense budgets are prepared using information directly from the _____ budget.

Blank 1: sales

The first step in the budgeting process is the preparation of the ____ budget.

Blank 1: sales or revenue

What number does the direct materials budget take directly from the production budget? A)Ending inventory of finished goods B)Budgeted sales C)Required production D)Beginning raw materials inventory

C)Required production

Which of the following is needed to prepare a sales budget? A)Beginning inventory of finished goods B)Desired ending inventory C)The budgeted number of units to be sold D)Desired ending inventory of raw materials

C)The budgeted number of units to be sold

Required borrowings on a cash budget is calculated by ______. A)subtracting the beginning cash balance from the amount of the cash deficiency B)adding the desired ending cash balance to the amount of cash excess C)adding the desired ending cash balance to the amount of the cash deficiency D)subtracting the desired ending cash balance from the amount of cash excess

C)adding the desired ending cash balance to the amount of the cash deficiency

A budgeted balance sheet is developed using data from the ______ of the budget period and data contained in the various schedules. A)average B)end C)beginning

C)beginning

In a manufacturing company, the ______ budget shows the number of units that must be manufactured to satisfy sales needs and provide for the desired ending inventory. A)sales B)cash C)production D)direct materials

C)production

In large organizations, many smaller individual budgets submitted by department heads and other responsible people comprise the ______ budget. A)ending finished goods inventory B)cash C)selling and administrative D)manufacturing overhead

C)selling and administrative

S&P Enterprises has scheduled direct material purchases of $120,000 in April, $140,000 in May and $160,000 in June. 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 May. A)$145,000 B)$125,000 C)$105,000 D)$135,000

D)$135,000 Reason: May purchases ($140,000 x 75%) $105,000 + April purchases ($120,000 x 25%) $30,000 = $135,000

ABC, Inc.'s expected sales for the first six month of the year are as follows. Month Expected Sales January $120,000 February $150,000 March $160,000 April $200,000 May $220,000 June $250,000 Experience has shown that 60% of sales are collected in the month of sale and 40% are collected the month after sale. Calculate expected cash collections for the month of March. A)$160,000 B)$176,000 C)$154,000 D)$156,000

D)$156,000 Reason: 60% of March sales ($96,000) + 40% of February sales ($60,000) = $156,000