SmartBook 8 - Budgeting

A detailed plan for the future that is usually expressed in formal quantitative terms is Blank______. A. A budget B. The budget Period C. Profit Planning d. Responsibility Accounting

A. A budget The key here is that the question mentions quantitative terms, that is for a budget the budget period is the specific timeline the budget should cover profit planning is the process for a business detailing how a company will achieve a goal level of profits responsibility accounting is the idea that a manager should be held responsible for only the items they can control

The receipts, disbursements, excess or deficiency, and financing section are all parts of the ____ budget.

Cash

The Cash Budget uses information from several other budgets. Which of the following budgets sis NOT used to prepare the cash Budget?

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.

Production these are all product costs, therefore they are in the production budget

What number does the direct materials budget take directly from the production budget?

Required production That is because on the direct materials budget you have know how many units you will have to produce so you can best make an assumption for your direct materials production

To calculate total sales on the sales budget, multiply budgeting sales in units by ____. A number of units Budgeted unit sales sales price per unit

Sales price per unit

Which budgets are directly based on information from the sales budget

Selling & admin expenses Production

The annual master budget file includes the Blank______ from last year because it is needed for the schedule of expected cash collections. income statement sales budget cash budget balance sheet

balance sheet because you can find the annual cash collections on the balance sheet

What is usually the major source of receipts in the receipts section of the cash budget

sales

If desired ending inventory is 25% of next months sales the number of units to be produced in march is 16000 17250 17000 21000

17000 that is because in this question we have to find how many units were being produced march. In order to find that we need to find out how many units were already in march, by getting the beginning inventory in march. The reason the beginning inventory of march is 25% of march is because, the desired ending inventory is the next months 25% sales. So, the ending inventory in febreuary is 4000, but the ending inventory in feb is the beginning inventory in march then we have to figure out how many units they ending with in march which is 25% of the next months

Using Budgeting assumptions when preparing the master budget, involves adjusting data inputs within each master budget schedule Makes it easier to answer "what-if" questions Increases the complexity of the process

Makes it easier to answer "what if questions"

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

The budgeted number of units to be sold

Many of the schedules in a master budget are based on a variety of management estimates and assumptions. True False

True

The amounts under the year column in the cash budget always equal the sum of the amounts for the months or quarters of the budget? True False

True

The cash budget ____ (in regards to order or preparation)

is prepared near the end of the budgeting process

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

manufacturing overhead budget

The first line of the direct labor budget consists of the budgeted units expected to be _____ during the period

produced

The final schedule of the master budget is the Blank______. cash budget sales budget budgeted income statement budgeted balance sheet

budgeted balance sheet

Required borrowings on a cash budget is calculated by ____

Adding the desired ending cash balance to the amount of cash deficiency that is because when you want to figure out how much money you need to borrow, you need to figure out how much money you want to end with, and how much money you are short by.