Chapter 9 Learning Mod Acct
The Paper Mill expects to sell 6,000 reams of paper in October and 8,000 in November for $6 each.
$36,000 October; $48,000 November
The Paper Mill expects to sell 9,000 reams of paper in November and 12,000 in December for $5 each.
$45,000 November; $60,000 December
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.
6.20
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
Which of the following is NOT a component of the direct labor budget?
Cost of goods sold
Which of the following is NOT a component of the operating budget of a service company?
Merchandise inventory
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 NOT a benefit to a merchant who accepts credit and debit card transactions?
The acceptance of credit cards slows the 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 starting point for creating the budget is ________.
actual or prior year budgeted data
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 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
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
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
Expected Number of Unit Sales × Expected Sales Price per Unit = Expected Total Sales Revenue is the computation for ________.
sales revenue
The characteristics of a retail credit card include each of the following EXCEPT ________.
the card issuer assumes the credit risk
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
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.
$1.55
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.
$160,000
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.
$6,120
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.
$66,000
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
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
Which of the following is NOT an outcome of the combined cash budget?
Total liabilities and stockholders' equity
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
