ACCT 202, Chapter 8, Poll Everywhere
There are various budgets within the master budget. One of these budgets is the production budget. Which of the following BEST describes the production budget? a. It details the required direct labor hours. b. It details the required raw materials purchases. c. It is calculated based on the sales budget and the desired ending inventory. d. It summarizes the costs of producing units for the budget period.
c. It is calculated based on the sales budget and the desired ending inventory.
Control involves developing goals and preparing various budgets to achieve those goals. T/F
false
One disadvantage of budgeting is that budgeting makes it more difficult to coordinate the activities of the entire organization. T/F
false
The cash budget is the starting point in preparing the master budget. T/F
false
A continuous or perpetual budget is a 12-month budget that rolls forward one month (or quarter) as the current month (or quarter) is completed. T/F
true
The budgeted income statement is typically prepared before the budgeted balance sheet. T/F
true
The direct labor budget begins with the required production in units from the production budget. T/F
true
The direct labor shows the direct labor hours required to satisfy the production budget. T/F
true
The number of units to be produced in a period can be determined by adding the expected sales to the desired ending inventory and then deducting the beginning inventory.
true
The production budget is typically prepared before the direct materials budget. T/F
true
The BRS Corporation makes collections on sales according to the following schedule: 30% in month of sale 60% in month following sale 10% in second month following sale The following sales have been budgeted: April Sales $140,000, May $130,000, and June $150,000. Budgeted cash collections in June would be: a. $137,000 b. $85,000 c. $45,000 d. $123,000
a. $137,000
Which of the following statements is NOT correct concerning the Manufacturing Overhead Budget? a. The Manufacturing Overhead Budget provides a schedule of all costs of production other than direct materials and labor costs. b. The Manufacturing Overhead Budget shows only the variable portion of manufacturing overhead. c. The Manufacturing Overhead Budget shows the expected cash disbursements for manufacturing overhead. d. The Manufacturing Overhead Budget is prepared after the Sales Budget.
b. The Manufacturing Overhead Budget shows only the variable portion of manufacturing overhead.
All of Gaylord Corporation's sales are on account. Thirty-five percent of the sales on account are collected in the month of sale, 45% in the month following sale, and the remainder are collected in the second month following sale. The following are budgeted sales data for the company: Total Sales for January $50,000, February $60,000, March $40,000, and April $30,000. What is the amount of cash that should be collected in March? a. $24,000 b. $37,000 c. $41,000 d. $51,000
d. $51,000
