Bengal Co. provides the following sales forecast for the next three months
Sales units:
-July 5,200
-August 5,900
-September 5,760
The company wants to end each month with ending finished goods inventory equal to 30% of the next month's sales. Finished goods inventory on June 30 is 1,560 ...
The company wants to end each month with ending finished goods inventory equal to 30% of the
next month's sales. Finished goods inventory on June 30 is 1,560 units. The budgeted production
units for July are correct answers July units + 30% of August units - June ending inventory =
July production
5,200 + (5,900 * 0.30) - 1,560 = 5,410
A July sales forecast projects that 6,800 units are going to be sold at a price of $11.30 per unit.
The management forecasts 15% growth in sales each month. Total July sales are anticipated to
be correct answers 6,800 × $11.30 = $76,840
Cahuilla Corporation predicts the following sales in units for the coming four months
Each month's ending finished goods inventory should be 30% of the next month's sales. March
31 finished goods inventory is 81 units. A finished unit requires 5 pounds of direct material B at
a cost of $3.00 per pound. The March 31 Raw Materials Inventory has 230 pounds of B. Each
month's ending Raw Materials Inventory should be 20% of the following month's production
needs. The budgeted production for May is correct answers For sales -> 310
For ening inventory (30% * 330) -> 99
Less beginning inventory (30% * 310) -> 93
310 + 99 - 93 = 316 units to produce
A formal statement of future plans, usually expressed in monetary terms, is a correct answers
budget
Operating budgets include all the following budgets except the correct answers cash budget
, The usual starting point for preparing a master budget is forecasting or estimating correct
answers sales
The master budgeting process typically begins with the sales budget and ends with a cash budget
and correct answers budgeted financial statements
The master budget process usually ends with correct answers the budgeted balance sheet
The usual budget period for most companies is correct answers an annual period separated into
quarterly and monthly budgets
A plan that lists dollar amounts to be received from disposing of plant assets and dollar amounts
to be spent on purchasing additional plant assets is called a correct answers capital expenditures
budget
Liza's predicts sales of $40,000 for May and $52,000 for June. Assume 60% of Liza's sales are
for cash. The remaining 40% are credit sales; these customers pay in the month following the
sale
Compute the budgeted cash receipts for June correct answers Budgeted sales - $52,000
Less ending accounts receivable - $20,800
(52,000 * 0.4)
Cash sales - $31,200
(52,000 * 0.6)
Collections of last month's receipts - $16,000
(40,000 * 0.4)
Total budgeted cash receipts - $47,200
Master Budget definition correct answers an integrated set of operating and financing budgets for
a period of time (on a yearly basis)
How do operating and financial budgets play a role in Master Budgets? correct answers -the
operating budgets can be used to prepare a budgeted income statement
-the financial budgets provide information for a budgeted balance sheet
Operating budgets correct answers sales budget
cost of goods sold budget
production budget
direct materials purchases budget
direct labor cost budget
factory overhead budget
selling and admin expense budget
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