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Exam 22: Budgeting

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Question 31

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Finewood Cabinet Manufacturers uses flexible budgets that are based on the following manufacturing data for the month of July: Prepare a flexible budget for Finewood based on production of 10,000, 15,000, and 20,000 units.

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Question 32

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Supervisor salaries, maintenance, and indirect factory wages would normally appear in the operating expenses budget.

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B) False

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Question 33

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Employees view budgeting more positively when goals are established for them by senior management.

Consider the following budget information: materials to be used totals $64,750; direct labor totals $198,400; factory overhead totals $394,800; work in process inventory January 1, 2012, was expected to be $189,100; and work in progress inventory on December 31, 2012, is expected to be $197,600. What is the budgeted cost of goods manufactured?

The budgeted balance sheet assumes that all operating and financing plans are met.

Dove Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business are $250,000, $320,000, and $410,000, respectively, for September, October, and November. The company expects to sell 25% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month of the sale, 30% in the month following the sale. The cash collections in November are:

If the expected sales volume for the current period is 9,000 units, the desired ending inventory is 200 units, and the beginning inventory is 300 units, the number of units set forth in the production budget, representing total production for the current period, is:

The responsibility for coordinating the preparation of a master budget should be assigned to the CEO of a firm.

The budget that needs to be completed first when preparing the master budget is the:

Warmfeet manufactures comforters. Assume the estimated inventories on January 1, 2012, for finished goods, work in process, and materials were $39,000, $33,000 and $27,000 respectively. Also assume the desired inventories on December 31, 2012, for finished goods, work in process, and materials were $42,000, $35,000 and $21,000 respectively. Direct material purchases were $575,000. Direct labor was $212,000 for the year. Factory overhead was $156,000. Prepare a cost of goods sold budget for Warmfeet, Inc.

A sporting goods store purchased $7,000 of ski boots in October. The store had $3,000 of ski boots in inventory at the beginning of October, and expects to have $2,000 of ski boots in inventory at the end of October to cover part of anticipated November sales. What is the budgeted cost of goods sold for October?

When management seeks to achieve personal departmental objectives that may work to the detriment of the entire company, the manager is experiencing:

The Warbler Jeans Company produces two different types of jeans. One is called the "Simple Life" and the other is called the "Fancy Life" The company's Production Budget requires 353,500 units of Simple jeans and 196,000 Fancy jeans to be manufactured. It is estimated that 2.5 direct labor hours will be needed to manufacture one pair of Simple Life jeans and 3.75 hours of direct labor hours for each pair of Fancy Life jeans. What is the total number of direct labor hours needed for both lines of jeans?

Crystal Company manufactures two models of microcassette recorders, VCH and MTV. Based on the following production data for April of the current year, prepare a production budget for April.

Based on the following production and sales data of Shingle Co. for March of the current year, prepare (a) a sales budget and (b) a production budget.

Production and sales estimates for May for the Robin Co. are as follows: The number of units expected to be sold in May is:

Mandy Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 98,000 units, and desired ending inventory is 80,000 units. The quantities of direct materials expected to be used for each unit of finished product are given below. Material A .50 lb. per unit @ $ .60 per pound Material B 1.00 lb. per unit @ $1.70 per pound Material C 1.20 lb. per unit @ $1.00 per pound The dollar amount of direct material C used in production during the year is:

Below is budgeted production and sales information for Bluebird Company for the month of December: The unit selling price for product XXX is $5 and for product ZZZ is $14. Budgeted production for product ZZZ during the month is:

The objectives of budgeting are (1) establishing specific goals for future operations, (2) executing plans to achieve the goals, and (3) periodically comparing actual results with these goals.

Principal components of a master budget include which of the following?