CH 8

Given budgeted sales of 10,000 units, desired ending inventory of 5,000 units, and beginning inventory of 2,000 units, required production is Blank______ units.

13,000

ABC, Inc.'s expected sales for the first six month of the year are: Month Expected Unit Sales January 12,000 February 15,000 March 16,000 April 20,000 May 22,000 June 25,000 If desired ending inventory is 25% of next month's sales, the number of units to be produced in March is Blank______.

17,000

An integrated business plan that formally lays out the company's goals is called the Blank______ budget.

master

A company's planned net profit that serves as a benchmark against which subsequent company performance can be measured is shown on the budgeted ____ ____. (Enter only one word per blank.)

income statement

A number of separate, but interdependent, budgets that formally lay out the company's sales, production, and financial goals are contained in the ____ budget. (Enter only one word per blank.)

master

A detailed plan used by a merchandising company that shows the amount of goods that must be purchased from suppliers during the period is called a(n) ____ ____ budget

merchandise purchases

The amount of goods to be acquired from suppliers during the period is shown on the Blank______ budget.

merchandise purchases

The cash budget Blank______.

is prepared near the end of the master budget process

Budgets are used for two distinct purposes: Blank______ and Blank______.

planning; control

During May, Davidson Corporation's expected sales equal 12,000 units and expected production is 15,000 units. If each unit requires 1/2 hour of direct labor and the direct labor rate is $12.00 per hour, the expected total direct labor cost for the month of May is $____ . (Enter your answer as a whole number.)

Blank 1: 90,000 or 90000

In a manufacturing company, the ____ budget is prepared right after the sales budget. (Enter only one word per blank.)

Blank 1: production

In a manufacturing company, the ____ budget is used to determine the direct materials budget, the direct labor budget, and the manufacturing overhead budget. (Enter only one word per blank.)

Blank 1: production

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. (Enter only one word per blank.)

Blank 1: production

Both the production and selling and administrative expense budgets are prepared using information directly from the ____ budget. (Enter only one word per blank.)

Blank 1: sales

The first step in the budgeting process is the preparation of the ____ budget. (Enter only one word per blank.)

Blank 1: sales or revenue

Which of the following budgets shows the company's planned profit and serves as a benchmark against which subsequent company performance can be measured?

Budgeted income statement

True or false: Control involves developing goals and preparing various budgets to achieve those goals.

False

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?

Production

The cash budget uses information from several other budgets. Which of the following budgets is NOT used to prepare the cash budget?

Production

Which of the following budgets are directly based on information from the sales budget?

Production Selling & administrative expense

Because all other parts of the budget depend on it, if the Blank______ budget is inaccurate, the rest of the budget will be inaccurate.

sales

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 Blank______.

$118,000

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

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.

$135,000

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. Multiple choice question.

$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.

$156,000

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 April.

$184,000

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.

$82,500

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 $____ . (Enter your answer as a number rounded to 2 decimal places.)

Blank 1: 6.25