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THEORIES: Basic Concepts 1. The concept concept of “management “management by exception” exception” refers refers to management’s management’s considerati consideration on of A. only those those items that that vary materially ly from expectatio expectations. ns. B. only only rare rare events events.. C. samples samples select selected ed at rand random. om. D. only significant significant nfavorable nfavorable deviations. deviations. !.

A formal formal "ritten statement statement of managemen management’s t’s plans for the ftre# ftre# pac$aged pac$aged in financial financial terms# is a% A. &esponsibility report. C. Cost of prodction report. B. 'erfo 'erform rman ance ce report. report. D . B d d ge ge t.t.

(.

Bdgets Bdgets are related related to "hich of the follo"ing lo"ing managemen managementt fnctions) fnctions) A. 'lanning C. C Coontrol B. 'erfor 'erforman mance ce evala evalatio tionn D. all of of the these se

((. Bdgeting Bdgeting spports spports the planning process by encoraging encoraging all of the follo"ing activities except% A. &e*iring &e*iring all organi+ationa organi+ationall nits to establish establish their goals for the the coming period. od. B. ,ncreasing ,ncreasing the motivation motivation of managers and employees employees by providing providing agreed-pon agreed-pon expectation expectations. s. C. ,mproving ,mproving overall decision decision ma$ing by considering considering all vie"points# nts# options# and cost control control programs. programs. D. Directing and coordinatin coordinatingg operations operations dring ng the period. period. .

/hich of the the follo"ing follo"ing advantages advantages does a bdget bdget mostly mostly provide) provide) A. Coordi Coordinati nation o n is increased n creased.. B. 'la 'lannin nningg is emp emphasi hasi+ed. + ed. C. Commn Commnicat ication ion is contin continos os.. D. Comparison Comparison of actal verss verss bdgeted bdgeted data.

(0. /hich of the follo"ing follo"ing is 2T an advantage advantage of bdgeting) bdgeting) A. ,t forces forces manage managers rs to plan. plan. B. ,t provides resorce resorce information information that can be be sed to improve improve decision ma$ing. ma$ing. C. ,t aids in the se of resorces and employees oyees by setting a benchmar$ benchmar$ that can be sed for the sbse*en sbse*entt evalation of performance. D. ,t provides provides organ organi+ationa i+ationall indepen independence. dence. 0.

16 x11 FinMan D

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MODULE 8 - BUDGETING



budgeting

/hich of the follo"ing is least li$ely a reason "hy a company prepares its bdget) A. To provide a basis basis for comparison comparison of actal actal performanc performancee B. To commnicate the company’s plans plans throghot the entire bsiness organi+ation organi+ation C. To control income and expenditre expenditre in a particlar period. D. To ma$e sre the the company company expands expands its operatio operations. ns.

3.

/hich of the follo"ing lo"ing does not contribt contribtee to an effective effective bdgeting) bdgeting) A. Top managem management ent is involved involved in bdget bdgeting. ing. B. To give give each manager manager a free hand in the preparation of the bdget# the da bdget are flexible. C. The organi+a organi+ation tion is divided divided into responsib responsibility ility nits. nits. D. There There is commn commnicatio icationn of reslts. ts.

4.

The bdgets bdgets that are based on a very high levels of performance# performance# li$e expe standards# A. assist in plann planning ing the operations operations of of the company company B. stimlate ate people people to perform perform better better than they ordinari ordinarily ly "old C. are helpfl helpfl in evalating evalating the the performance performance of manager managerss D. can lead lead to lo" levels levels of perfo performan rmance ce

5.

/hich of of the follo"i follo"ing ng stateme statements nts is incorre incorrect) ct) A. An imposed imposed bdget bdget is the same same as a participati cipative ve bdget. bdget. B. 'reparation of of the bdget bdget "old be the responsibility of each responsibility C. Top Top management’s management’s spport is necessary to promote bdget bdget participation D. The top management shold revie" and approve approve each responsibility nit’s

6.

The primary primary role of the the bdget bdget director and and the bdgetin bdgetingg department department is to A. 7ettle disptes disptes among operating operating exectives ves dring the development opment of th plan. B. Develop Develop the annal annal profit profit plan by selectin selectingg the alterna alternative tivess to be sggestions sbmitted by the varios operating segments. C. Compile the bdget bdget and manage manage the the bdget bdget process. process. D. 8stify the bdget bdget to the corporate corporate planning planning committee committee of the board board of dire

19. The primary variable affecting affecting active participation on and commitment to the bd system is A. :anagement :anagement efforts efforts to achieve the the bdget bdget rather than optimi+e optimi+e reslts. ts. B. The rigid adherenc adherencee to the bdget bdget "ithot recogni+ing recogni+ing changing changing conditions conditions C. Top management management involvement nvolvement in spport spport of the bdget. bdget. D. The opportnity opportnity bdgetin bdgetingg gives to ris$-ta$er managers managers for for departme

1(. A variant of fiscal-year bdgeting bdgeting "hereby "hereby a t"elve-month pro;ections ections into the f at all times% A.
3. The method of bdgeting bdgeting "hich adds one month’s month’s bdget to the end of the pla month’s bdget is dropped from the plan refers to A. >ong-term bdget C. ,ncremental bdge 1 7 7

B.

2peratio ns bdget

D. Contin os bdget

A. B. C. D.

(5. A continos bdget A. is a bdget that is revised monthly or *arterly. B. is a medim term plan that consists of more than ( years’ pro;ections. C. is appropriate only for se of a not-for-profit entity. D. "or$s best for an entity that can reliably forecast events a year or more into the ftre.

involves the revie" of changes made to an organi+ation’s original bdge does not provide a smmary of annal pro;ections. involves the revie" of each cost component from a cost?benefit perspe emphasi+es the relationship of effort to pro;ected annal revenes.

1!. A systemati+ed approach $no"n as +ero-based bdgeting% A. Classifies the bdget by the prior year’s activity and estimates the benefi activity. B. Commence "ith either the crrent level of spending or pro;ected "hichever C. 'resents planned activities for a period of time bt does not present a firm co D. Divides the activities of individal responsibility centers into a series of prioriti+ed.

5. “,ncremental bdgeting” refers to A. line-by-line approval of expenditres B. setting bdget allo"ances based on prior year expenditres C. re*iring top management approval of increases in bdgets D. sing incremental revenes and costs in bdgeting 06. A bdget plan for annal fixed costs that arises from top management decisions directly reflecti ng corporate policy. A.
(9. /hich of the follo"ing statements abot =ero-based bdgeting is incorrect) A. All activities in the company are organi+ed into brea$-p nits called pac$ag B. All costs have to be ;stified every bdgeting period. C. The process is not time consming since ;stification of costs can be done a D. =ero-based bdgeting incldes variable costs only.

4. The term “decision pac$age” relates to A. comprehensive bdgeting B. +ero-based bdgeting

0. Bdgeting expenditres by prpose is called

You're Reading a Preview

C. program bdgeting D. line bdgeting

Unlock full access with a free trial.bdgeting A. program B.

01. The bdget approach that is more relevant "hen the continance of an activity or operation mst be ;stified on the basis of its need or seflness to the organi+ation. A. the incremental approach C. the baseline approach B. the +ero-based approach D. both a and b are tre

C. +ero-based bdget D. flexible bdgeting

line bdgeting

(!. A static bdget is not appropriate in evalating a manager@s effectiveness if a

A. Trial sbstantial fixed costs. Download With Free

11. The process of developing bdget estimates by re*iring all levels of management to estimate sales# prodction# and other operating data as thogh operations "ere being initiated for the first time is referred to as% A.
B. sbstantial variable costs. C. planned activity levels that match actal activity levels. D. no variable costs.

03.
13. A bdget that presents the plan for a range of activity so that the plan can be ad in activity levels is referred to as% A. =ero-based bdgeting. B. Continos bdgetin g. C.
1. =ero-based bdgeting% 1 7 8

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Capital Budgeting

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2peratio ns bdget

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budgeting

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16 x11 FinMan D

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D. Contin os bdget

A. B. C. D.

(5. A continos bdget A. is a bdget that is revised monthly or *arterly. B. is a medim term plan that consists of more than ( years’ pro;ections. C. is appropriate only for se of a not-for-profit entity. D. "or$s best for an entity that can reliably forecast events a year or more into the ftre.

involves the revie" of changes made to an organi+ation’s original bdge does not provide a smmary of annal pro;ections. involves the revie" of each cost component from a cost?benefit perspe emphasi+es the relationship of effort to pro;ected annal revenes.

1!. A systemati+ed approach $no"n as +ero-based bdgeting% A. Classifies the bdget by the prior year’s activity and estimates the benefi activity. B. Commence "ith either the crrent level of spending or pro;ected "hichever C. 'resents planned activities for a period of time bt does not present a firm co D. Divides the activities of individal responsibility centers into a series of prioriti+ed.

5. “,ncremental bdgeting” refers to A. line-by-line approval of expenditres B. setting bdget allo"ances based on prior year expenditres C. re*iring top management approval of increases in bdgets D. sing incremental revenes and costs in bdgeting 06. A bdget plan for annal fixed costs that arises from top management decisions directly reflecti ng corporate policy. A.
(9. /hich of the follo"ing statements abot =ero-based bdgeting is incorrect) A. All activities in the company are organi+ed into brea$-p nits called pac$ag B. All costs have to be ;stified every bdgeting period. C. The process is not time consming since ;stification of costs can be done a D. =ero-based bdgeting incldes variable costs only.

4. The term “decision pac$age” relates to A. comprehensive bdgeting B. +ero-based bdgeting

0. Bdgeting expenditres by prpose is called

You're Reading a Preview

C. program bdgeting D. line bdgeting

Unlock full access with a free trial.bdgeting A. program B.

01. The bdget approach that is more relevant "hen the continance of an activity or operation mst be ;stified on the basis of its need or seflness to the organi+ation. A. the incremental approach C. the baseline approach B. the +ero-based approach D. both a and b are tre

C. +ero-based bdget D. flexible bdgeting

line bdgeting

(!. A static bdget is not appropriate in evalating a manager@s effectiveness if a

A. Trial sbstantial fixed costs. Download With Free

11. The process of developing bdget estimates by re*iring all levels of management to estimate sales# prodction# and other operating data as thogh operations "ere being initiated for the first time is referred to as% A.
B. sbstantial variable costs. C. planned activity levels that match actal activity levels. D. no variable costs.

03.
13. A bdget that presents the plan for a range of activity so that the plan can be ad in activity levels is referred to as% A. =ero-based bdgeting. B. Continos bdgetin g. C.
1. =ero-based bdgeting% 1 7 8

14. A flexible bdget is A. one that can be changed "henever a manager so desires B. ad;sted to reflect expected costs at the actal level of activity C. one that ses the formla total costs  cost per nit x nits prodced D. the same as a continos bdget

D.

being incongrent "ith participative bdgeting

0. Bdget slac$ is a condition in "hich A. Demand is lo" at varios times of the year B. xcess machine capacity exists in some areas of the plant C. There is an intentional overestimate of expenses or an nderestimate of re D. :anagers grant favored employees extra time-off

(4. A series of bdgets for varying levels of activity is a% A. ariable cost bdget. C. :aster bdget. B.
6. The procedre for setting profit ob;ectives in "hich the determination of sbordinated to the planning# and the ob;ectives emerge as the prodct of the p A. a priori method C. practical method B. theoretical method D. a posteriori method

09. The procedre for setting profit ob;ectives in "hich management specifies a g that it see$s to reali+e in the long rn by means of planning to"ard that end is th A. a priori method C. pragmatic method B. theoretical method D. ad hoc method

04. The basic difference bet"een a master bdget and a flexible bdget is that a A.
You're Reading a Preview

05. /hich of the follo"ing is a difference bet"een a static bdget and a flexible bdgets) A. A flexible bdget incldes only variable costs a static bdget incldes only fixed costs. B. A flexible bdget incldes all costs# a static bdget incldes only fixed costs. C. A flexible bdget gives different allo"ances for different levels of activity# a static bdget does not. D. There is no difference bet"een the t"o.

0(. /hich of the follo"ing is not a potential problem "ith participative bdgeting) A. setting standards that are either too high or too lo" B. padding the bdget C. bild slac$ into the bdget D. all of the above are potential problems

15. A system that classifies bdget re*ests by activity and estimates the benefits arising from each activity% A. ,ncremental bdgeting system. B. 7tatic bdgeting system. C. 'rogram planning and bdgeting system. D. 'articipative system.

. The ideal financial planning process "old be A. top-do"n planning. B. bottom-p planning. C. a combination of top-do"n and bottom-p planning. D. one of the above

(1. A bdget that identifies revenes and costs "ith an individal controlling their incrrence is A. :aster bdget C. 'rodct bdget B. &esponsibility bdget D. one of the above

00. A common starting point in the bdgeting process is A. expected ftre net income. C. to motivate the sa B. past performance. D. a clean slate# "ith no e

(3. The difference bet"een an individal@s sbmitted bdget pro;ection and his or her best estimate of the item being pro;ected is an example of A. padding the bdget B. adhering to +ero-based bdgeting assmptions C. creating bdgetary slac$

35. /hich one of the follo"ing is an external factor that "old need to be considered bdget proposal) A. changes in prodct design B. introdction of a ne" prodct C. competitors@ actions

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Capital Budgeting

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16 x11 FinMan D

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14. A flexible bdget is A. one that can be changed "henever a manager so desires B. ad;sted to reflect expected costs at the actal level of activity C. one that ses the formla total costs  cost per nit x nits prodced D. the same as a continos bdget

D.



being incongrent "ith participative bdgeting

0. Bdget slac$ is a condition in "hich A. Demand is lo" at varios times of the year B. xcess machine capacity exists in some areas of the plant C. There is an intentional overestimate of expenses or an nderestimate of re D. :anagers grant favored employees extra time-off

(4. A series of bdgets for varying levels of activity is a% A. ariable cost bdget. C. :aster bdget. B.
6. The procedre for setting profit ob;ectives in "hich the determination of sbordinated to the planning# and the ob;ectives emerge as the prodct of the p A. a priori method C. practical method B. theoretical method D. a posteriori method

09. The procedre for setting profit ob;ectives in "hich management specifies a g that it see$s to reali+e in the long rn by means of planning to"ard that end is th A. a priori method C. pragmatic method B. theoretical method D. ad hoc method

04. The basic difference bet"een a master bdget and a flexible bdget is that a A.
You're Reading a Preview

05. /hich of the follo"ing is a difference bet"een a static bdget and a flexible bdgets) A. A flexible bdget incldes only variable costs a static bdget incldes only fixed costs. B. A flexible bdget incldes all costs# a static bdget incldes only fixed costs. C. A flexible bdget gives different allo"ances for different levels of activity# a static bdget does not. D. There is no difference bet"een the t"o.

0(. /hich of the follo"ing is not a potential problem "ith participative bdgeting) A. setting standards that are either too high or too lo" B. padding the bdget C. bild slac$ into the bdget D. all of the above are potential problems

15. A system that classifies bdget re*ests by activity and estimates the benefits arising from each activity% A. ,ncremental bdgeting system. B. 7tatic bdgeting system. C. 'rogram planning and bdgeting system. D. 'articipative system.

. The ideal financial planning process "old be A. top-do"n planning. B. bottom-p planning. C. a combination of top-do"n and bottom-p planning. D. one of the above

(1. A bdget that identifies revenes and costs "ith an individal controlling their incrrence is A. :aster bdget C. 'rodct bdget B. &esponsibility bdget D. one of the above

00. A common starting point in the bdgeting process is A. expected ftre net income. C. to motivate the sa B. past performance. D. a clean slate# "ith no e

(3. The difference bet"een an individal@s sbmitted bdget pro;ection and his or her best estimate of the item being pro;ected is an example of A. padding the bdget B. adhering to +ero-based bdgeting assmptions C. creating bdgetary slac$

35. /hich one of the follo"ing is an external factor that "old need to be considered bdget proposal) A. changes in prodct design B. introdction of a ne" prodct C. competitors@ actions

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D.

adoption of a ne" manfactring process 33. The increased se of atomation and less se of the "or$ force in compan to"ards an increase in A. both variable and fixed costs. B. fixed costs and a decrease in variable costs. C. variable costs and a decrease in fixed costs. D. variable costs and no change in fixed costs.

10. 2perating bdgets are A. a forecast of expected operating expenses. B. a forecast of operating expenses and related revenes. C. a forecast of nits of prodction. D. concerned "ith the income-generating activities of a firm. 30. /hat is the proper preparation se*encing of the follo"ing bdgets) 1. Bdgeted Balance 7heet (. 7ales Bdget . 7elling and Administrative Bdget 0. Bdgeted ,ncome 7tatement A. 1# (# # 0 C. (# # 0# 1 B (# # 1# 0 D. (# 0# 1# 

(. ,n preparing a cash bdget# "hich of the follo"ing is normally the starting po re*irements) A.
3(. &ecognition of the many ncertainties in bdgeting is exemplified by companies n A. forecasting sales B. establishing minimm re*ired cash balances C. forecasting only fixed costs D. omitting expected dividend payments from bdgeted disbrsements

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(6. ,n estimating the sales volme for a master bdget# "hich of the follo"ing techni*es may be sed to improve the pro;ections) A. Brainstorming. B. 7tatis tical analysis. 16. /hich of the follo"ing statements is Tre) Unlock full access with a free trial. C. stimating from previos sales volme. A. Ender +ero-based bdgeting# a manager is re*ired to start at +ero bdget D. All of these are sefl. as if the programs involved "ere being initiated for the first time. B. The primary prpose of the cash bdget is to sho" the expected cash balan 9. Esing the concept of Fexpected vale” in sales forecasting means that the sales forecast to be sed is bdget period. A. developed sing the indicator method C. Bdget data are generally prepared by top management and distribt B. the sm of the sales expected by individal managers organi+ation. C. based on expected selling prices of the prodcts D. The bdget committee is responsible for preparing detailed bdget figres in D. based on probabil itie s (. /hich of the follo"ing is a valid statement) 1. 7everal sales forecasts are available from different sorces and the managers have good ideas abot their li$elihoods. This A. &esponsibility bdget identifies revene and costs "ith the individa sitation call for the se of incrrence. A. the expected vale concept C. indicator methods B. The best "ay to establish bdget figres is to se last year’s actal cost B. historical analysis D. a scatter diagram year’s bdget estimates. C. A sales bdget and a sales forecast are the same thing. 3. An overly optimistic sales bdget may reslt in D. The primary prpose of the cash bdget is to sho" the expected cash balan A. increases in selling prices late in the year. bdget period. B. insfficient inventories. PROBLEMS: C. increased sales dring the year. Cost estimation fom!"a  D. excessive inventories. i . :anagement has prepared a graph sho"ing the total costs of operatin 34. /hich of the follo"ing bdgets provides the data for the preparation of the direct labor cost bdget) throghot the contry. The cost line crosses the vertical axis at '099#999 A. Direct materials prchase bdget. C. 7ales bdget. operating one branch is '439#999. The total cost of operating ten branches B. Cash bdget. D. 'rodction bdget. prposes of preparing a flexible bdget based on the nmber of branch "areh

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budgeting

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adoption of a ne" manfactring process 33. The increased se of atomation and less se of the "or$ force in compan to"ards an increase in A. both variable and fixed costs. B. fixed costs and a decrease in variable costs. C. variable costs and a decrease in fixed costs. D. variable costs and no change in fixed costs.

10. 2perating bdgets are A. a forecast of expected operating expenses. B. a forecast of operating expenses and related revenes. C. a forecast of nits of prodction. D. concerned "ith the income-generating activities of a firm. 30. /hat is the proper preparation se*encing of the follo"ing bdgets) 1. Bdgeted Balance 7heet (. 7ales Bdget . 7elling and Administrative Bdget 0. Bdgeted ,ncome 7tatement A. 1# (# # 0 C. (# # 0# 1 B (# # 1# 0 D. (# 0# 1# 

(. ,n preparing a cash bdget# "hich of the follo"ing is normally the starting po re*irements) A.
3(. &ecognition of the many ncertainties in bdgeting is exemplified by companies n A. forecasting sales B. establishing minimm re*ired cash balances C. forecasting only fixed costs D. omitting expected dividend payments from bdgeted disbrsements

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(6. ,n estimating the sales volme for a master bdget# "hich of the follo"ing techni*es may be sed to improve the pro;ections) A. Brainstorming. B. 7tatis tical analysis. 16. /hich of the follo"ing statements is Tre) Unlock full access with a free trial. C. stimating from previos sales volme. A. Ender +ero-based bdgeting# a manager is re*ired to start at +ero bdget D. All of these are sefl. as if the programs involved "ere being initiated for the first time. B. The primary prpose of the cash bdget is to sho" the expected cash balan 9. Esing the concept of Fexpected vale” in sales forecasting means that the sales forecast to be sed is bdget period. A. developed sing the indicator method C. Bdget data are generally prepared by top management and distribt B. the sm of the sales expected by individal managers organi+ation. C. based on expected selling prices of the prodcts D. The bdget committee is responsible for preparing detailed bdget figres in D. based on probabil itie s (. /hich of the follo"ing is a valid statement) 1. 7everal sales forecasts are available from different sorces and the managers have good ideas abot their li$elihoods. This A. &esponsibility bdget identifies revene and costs "ith the individa sitation call for the se of incrrence. A. the expected vale concept C. indicator methods B. The best "ay to establish bdget figres is to se last year’s actal cost B. historical analysis D. a scatter diagram year’s bdget estimates. C. A sales bdget and a sales forecast are the same thing. 3. An overly optimistic sales bdget may reslt in D. The primary prpose of the cash bdget is to sho" the expected cash balan A. increases in selling prices late in the year. bdget period. B. insfficient inventories. PROBLEMS: C. increased sales dring the year. Cost estimation fom!"a  D. excessive inventories. i . :anagement has prepared a graph sho"ing the total costs of operatin 34. /hich of the follo"ing bdgets provides the data for the preparation of the direct labor cost bdget) throghot the contry. The cost line crosses the vertical axis at '099#999 A. Direct materials prchase bdget. C. 7ales bdget. operating one branch is '439#999. The total cost of operating ten branches B. Cash bdget. D. 'rodction bdget. prposes of preparing a flexible bdget based on the nmber of branch "areh

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 "hat formla "old be sed to determine bdgeted costs at vari os levels of ac tivity) A. G  '099#999 H '(39#999I C. G  '439#999 H '099#999I B. G  '099#999 H '(69#999I D. G  '439#999 H '(39#999I Sa"es #!$%et P!c&ases #!$%et ' mec&an$isin% concen ii . 'T2 Company desires an ending inventory of '109#999. ,t expects sales of '!99#999 and has a beginning inventory of '19#999. Cost of sales is 43J of sales. Bdgeted prchases are A. ' 39#999 C. ' !19#999 B. ' 569#999 D. '1#959#999 iii

.

i(

Calypso Co. has pro;ected sales to be '499#999 in 8anary# '539#999 in
The desired monthly ending inventory in nits of finished prodct is !9J o estimated sales. There are 99#999 finished nits in the inventory on 8ne 9. ach nit re*ires for ponds of direct materials at a cost of '(.39 per pond. There a of direct materials in the inventory on 8ne 9. Lo" many nits shold be prodced for the three-month period ending 7eptemb A . 1 #( 49 #9 99 C. 1#1#009 B. 1#(!#999 D. 1#0(0#939

En$in% in(ento) #!$%et viii . ,f the re*ired direct materials prchases are !#999 ponds and the direct ma prodction is three times the direct materials prchases# and the beginning d three and a half times the direct materials prchases# "hat are the desired en in ponds) A. (9#999 C. 1(# 999 B. 0#999 D. (#999

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Ra* mateia"s !sa%e #!$%et Ble Company bdgeted prchases of '199#999. Cost of sales "as '1(9#999 and the desired ending inventory "as '0(#999. ix The beginning inventory "as . :inerva Company sells a single prodct. Bdgeted sales for the year ar A. '(9#999 C. '0(#999 409#999 nits. The estimated beginning and ending finished goods inventor Unlock full access with a free B. ' (# 999 D . '4( #99 9 69#999#trial. respectively. A prodction of one nit re*ires the follo"ing materials% :aterial >> v . The payment schedle of prchases made on accont is% 49J in the time period of prchase# 9J in the follo"ing time :aterial :: period# and 19J in the sbse*ent time period. Total credit prchases "ere '(99#999 in :ay# and '199#999 in 8ne. Total :aterial  payments on credit prchases "ere '109#999 in 8ne. /hat "ere the credit prchases in the month of April) /hat are the respective peso amonts of each material to be sed in prodction A . ' (9 9# 999 C . ' 10 3# 99 9 :aterial >> :aterial :: B. '199#999 D. '(13#999 A. '1!1#(99 '1#9(4#!99 B. '1!1#(99 '1#9(4#!99 Po$!ction #!$%et C. '1!4#499 '1#935#099 vi . :ontalban Company’s sales bdget sho"s the follo"ing expected sales for the follo"ing year% D. '1!4#499 '1#935#099 Karter Enits orie Company plans to sell 099#999 nits of finished prodct in 8ly an anticipates a gro"th rate in sales of 3J per month. .

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 "hat formla "old be sed to determine bdgeted costs at vari os levels of ac tivity) A. G  '099#999 H '(39#999I C. G  '439#999 H '099#999I B. G  '099#999 H '(69#999I D. G  '439#999 H '(39#999I Sa"es #!$%et P!c&ases #!$%et ' mec&an$isin% concen ii . 'T2 Company desires an ending inventory of '109#999. ,t expects sales of '!99#999 and has a beginning inventory of '19#999. Cost of sales is 43J of sales. Bdgeted prchases are A. ' 39#999 C. ' !19#999 B. ' 569#999 D. '1#959#999 iii

.

16 x11 FinMan D

Calypso Co. has pro;ected sales to be '499#999 in 8anary# '539#999 in


The desired monthly ending inventory in nits of finished prodct is !9J o estimated sales. There are 99#999 finished nits in the inventory on 8ne 9. ach nit re*ires for ponds of direct materials at a cost of '(.39 per pond. There a of direct materials in the inventory on 8ne 9. Lo" many nits shold be prodced for the three-month period ending 7eptemb A . 1 #( 49 #9 99 C. 1#1#009 B. 1#(!#999 D. 1#0(0#939

En$in% in(ento) #!$%et viii . ,f the re*ired direct materials prchases are !#999 ponds and the direct ma prodction is three times the direct materials prchases# and the beginning d three and a half times the direct materials prchases# "hat are the desired en in ponds) A. (9#999 C. 1(# 999 B. 0#999 D. (#999

You're Reading a Preview

i(

Ra* mateia"s !sa%e #!$%et Ble Company bdgeted prchases of '199#999. Cost of sales "as '1(9#999 and the desired ending inventory "as '0(#999. ix The beginning inventory "as . :inerva Company sells a single prodct. Bdgeted sales for the year ar A. '(9#999 C. '0(#999 409#999 nits. The estimated beginning and ending finished goods inventor Unlock full access with a free B. ' (# 999 D . '4( #99 9 69#999#trial. respectively. A prodction of one nit re*ires the follo"ing materials% :aterial >> v . The payment schedle of prchases made on accont is% 49J in the time period of prchase# 9J in the follo"ing time :aterial :: period# and 19J in the sbse*ent time period. Total credit prchases "ere '(99#999 in :ay# and '199#999 in 8ne. Total :aterial  payments on credit prchases "ere '109#999 in 8ne. /hat "ere the credit prchases in the month of April) /hat are the respective peso amonts of each material to be sed in prodction A . ' (9 9# 999 C . ' 10 3# 99 9 :aterial >> :aterial :: B. '199#999 D. '(13#999 A. '1!1#(99 '1#9(4#!99 B. '1!1#(99 '1#9(4#!99 Po$!ction #!$%et C. '1!4#499 '1#935#099 vi . :ontalban Company’s sales bdget sho"s the follo"ing expected sales for the follo"ing year% D. '1!4#499 '1#935#099 Karter Enits orie Company plans to sell 099#999 nits of finished prodct in 8ly an anticipates a gro"th rate in sales of 3J per month. .

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1 8 1

8ly "old be A. 1#3(3 ponds B. (#699 ponds xii

.

for the fiscal year of 8ne 1# (994 throgh :ay 1# (995. 8ne 1# (994 &a" materialN 09#999 /or$-in-process 19#999
C. (#339 ponds D. #939 ponds

ach nit of finished prodct ses 4 $ilograms of ra" materials. The prodction and inventory bdgets for :ay (995 are as follo"s% Beginning ,nventory%
xvi

.

Diliman Corporation incldes the follo"ing *arterly bdget for prodction% Karter 'rod
You're Reading a Preview

+iii

. iolet Company manfactres a single prodct. ,t $eeps its inventory of finished goods at t"ice the coming month’s bdgeted Unlockach fullnit access with sales# inventory of ra" materials at 139J of the coming month’s bdgeted prodction re*irements. of prodct re*ires t"o ponds of materials. The prodction bdgets in nits consist of t he follo"ing%. :ay 1#999 8ne 1#(99 In$iect "a#o costs 8ly 1#99 xvii . amco# ,nc. ses flexible bdgeting for cost control. Dring the month of 7 Agst 1#499 ,nc. prodced 10#399 nits of finished goods "ith indirect labor costs of '( &a" material prchases in 8ne "old be master bdget reflects an indirect labor costs# a variable cost# of '49#999 b A. (#499 ponds C. (#099 ponds prodction of (99#999 nits. ,n the preparation of performance analysis B. 1#!99 ponds D. (#599 ponds 7eptember# ho" mch flexible bdget shold be allo"ed for indirect labor costs) A. '9#999 C. '(3#53 xiv . Sales Company is budgeting sales of 300,000 units of its only product for the coming year. B. '(6# 145 D . ' (4 #19 9

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Production of one unit of product requires three pounds of Material Q and 2 pounds of Material . !n"entory units at the beginning of the year are# Actal# 8an. 1

Bdgeted# Dec 1

!!#999 64#999 Lo" many ponds of :aterial K is 7ales planning to by dring the coming year) A. !39#999 C . ! 4( #9 99 B. !69#999 D. 69!#999 xv

.

7trama Company prepares its bdgets on annal basis. The follo"ing beginning and ending inventory nit levels are planned 1 8 2

Cas& eceipts #!$%et 7ales xviii . Qeneros Company began its operations on 8anary 1 of the crrent year first *arter are '(09#999# '99#999# and '0(9#999# respectively# for 8an :arch. Qeneros Company expects (9J of its sales cash and the remainder sales on accont# 59J are expected to be collected in the month of sale# follo"ing the sale# and the remainder in the follo"ing month. Lo" mch shold Qeneros receive from sales in :arch) A . ' 90 #! 99 C . ' ! !# !9 9 B. (60#999 D. '(63#(99

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8ly "old be A. 1#3(3 ponds B. (#699 ponds xii

.

Capital Budgeting

1

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of 17

budgeting

 

16 x11 FinMan D

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for the fiscal year of 8ne 1# (994 throgh :ay 1# (995. 8ne 1# (994 &a" materialN 09#999 /or$-in-process 19#999
C. (#339 ponds D. #939 ponds

ach nit of finished prodct ses 4 $ilograms of ra" materials. The prodction and inventory bdgets for :ay (995 are as follo"s% Beginning ,nventory%


xvi

.

Diliman Corporation incldes the follo"ing *arterly bdget for prodction% Karter 'rod
You're Reading a Preview

+iii

. iolet Company manfactres a single prodct. ,t $eeps its inventory of finished goods at t"ice the coming month’s bdgeted Unlockach fullnit access with sales# inventory of ra" materials at 139J of the coming month’s bdgeted prodction re*irements. of prodct re*ires t"o ponds of materials. The prodction bdgets in nits consist of t he follo"ing%. :ay 1#999 8ne 1#(99 In$iect "a#o costs 8ly 1#99 xvii . amco# ,nc. ses flexible bdgeting for cost control. Dring the month of 7 Agst 1#499 ,nc. prodced 10#399 nits of finished goods "ith indirect labor costs of '( &a" material prchases in 8ne "old be master bdget reflects an indirect labor costs# a variable cost# of '49#999 b A. (#499 ponds C. (#099 ponds prodction of (99#999 nits. ,n the preparation of performance analysis B. 1#!99 ponds D. (#599 ponds 7eptember# ho" mch flexible bdget shold be allo"ed for indirect labor costs) A. '9#999 C. '(3#53 xiv . Sales Company is budgeting sales of 300,000 units of its only product for the coming year. B. '(6# 145 D . ' (4 #19 9

Download With Free Trial

Production of one unit of product requires three pounds of Material Q and 2 pounds of Material . !n"entory units at the beginning of the year are# Actal# 8an. 1

Bdgeted# Dec 1

!!#999 64#999 Lo" many ponds of :aterial K is 7ales planning to by dring the coming year) A. !39#999 C . ! 4( #9 99 B. !69#999 D. 69!#999 xv

.

7trama Company prepares its bdgets on annal basis. The follo"ing beginning and ending inventory nit levels are planned

Cas& eceipts #!$%et 7ales xviii . Qeneros Company began its operations on 8anary 1 of the crrent year first *arter are '(09#999# '99#999# and '0(9#999# respectively# for 8an :arch. Qeneros Company expects (9J of its sales cash and the remainder sales on accont# 59J are expected to be collected in the month of sale# follo"ing the sale# and the remainder in the follo"ing month. Lo" mch shold Qeneros receive from sales in :arch) A . ' 90 #! 99 C . ' ! !# !9 9 B. (60#999 D. '(63#(99

1 8 2

Credit sales xix . :endre+ Company has a colle ction schedle of 49J drin g the month of sales# 13J the follo "ing month# and 13J sbse*ently. The total credit sales in the crrent month of 7eptember "ere '!9#999 and total collections in 7eptember "ere '35#999. /hat "ere the credit sales in 8ly) A. '69#999 C. '03#999 B. '9#999 D . ' ( #99 9 Cash collections xx . 2bligacion Company has '(66#999 in acconts receivable on 8anary 1# (994. Bdgeted sales for 8anary are '!49#999. 2bligacion expects to sell (9J of its merchandise for cash. 2f the remaining sales# 53J are expected to be collected in the month of sale and the remainder the follo"ing month. The 8anary cash collections from sales are% A. '!13#999 C. '051#999 B . ' 46 1# 999 D . ' 6! 5# 99 9 xxi

.

The estimated total cash collections dring the forth calendar *arter from sa accont dring the forth calendar *arter "old be A. '15(#399 C. '(43#099 B . ' (9 #9 99 D . ' (3 1# 09 9 xxiii

. The >e Amore Company had the follo"ing bdgeted sales for the first half of the c Cash 7ales 8anary '59#999
The company is in the process of preparing a cash bdget and mst determine th collections by month. To this end# the follo"ing information has been assembled%

You're Reading a Preview

Adel Company has the follo"ing sales forecasts for the selected three-month period in (995% :onth 7ales Collections on sales% 49J in month of sale April '1(#999 9J in month follo"ing :ay 5#999 19J in second month follo"i Unlock full access with a free trial. 8ne !#999 The acconts receivable balance on 8anary 1 of the crrent year "as '59#999# 7eventy percent of sales are collected in the month of the sale# and the remainder is collected in the follo"ing month. represents ncollected December sales and '(9#999 represents ncollected ov Acconts receivable balance OApril 1# (995P '19#999 The total cash collected by >e Amore Company dring the month of 8anary "ol Cash balance OApril 1# (995P 3#999 A. '019#999 C. '00#999 :inimm cash balance is '3#999. Cash can be borro"ed in '1#999 increments from the local ban$ Oassme no interest B . ' (30 #999 D . '  1# 39 9 chargesP. Lo" mch cash "old be collected in 8ne from sales) Acconts receivable balance xxiv A. ' 5#599 C. ' !#999 . As of 8anary 1# (995# the >iberal 7ales Company had an accont receivable B. ' !#399 D. '19#999 sales for 8anary#
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Capital Budgeting

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Cash collections xx . 2bligacion Company has '(66#999 in acconts receivable on 8anary 1# (994. Bdgeted sales for 8anary are '!49#999. 2bligacion expects to sell (9J of its merchandise for cash. 2f the remaining sales# 53J are expected to be collected in the month of sale and the remainder the follo"ing month. The 8anary cash collections from sales are% A. '!13#999 C. '051#999 B . ' 46 1# 999 D . ' 6! 5# 99 9 .

16 x11 FinMan D

 Search document

Credit sales xix . :endre+ Company has a colle ction schedle of 49J drin g the month of sales# 13J the follo "ing month# and 13J sbse*ently. The total credit sales in the crrent month of 7eptember "ere '!9#999 and total collections in 7eptember "ere '35#999. /hat "ere the credit sales in 8ly) A. '69#999 C. '03#999 B. '9#999 D . ' ( #99 9

xxi

budgeting



The estimated total cash collections dring the forth calendar *arter from sa accont dring the forth calendar *arter "old be A. '15(#399 C. '(43#099 B . ' (9 #9 99 D . ' (3 1# 09 9 xxiii

. The >e Amore Company had the follo"ing bdgeted sales for the first half of the c Cash 7ales 8anary '59#999
The company is in the process of preparing a cash bdget and mst determine th collections by month. To this end# the follo"ing information has been assembled%

You're Reading a Preview

Adel Company has the follo"ing sales forecasts for the selected three-month period in (995% :onth 7ales Collections on sales% 49J in month of sale April '1(#999 9J in month follo"ing :ay 5#999 19J in second month follo"i Unlock full access with a free trial. 8ne !#999 The acconts receivable balance on 8anary 1 of the crrent year "as '59#999# 7eventy percent of sales are collected in the month of the sale# and the remainder is collected in the follo"ing month. represents ncollected December sales and '(9#999 represents ncollected ov Acconts receivable balance OApril 1# (995P '19#999 The total cash collected by >e Amore Company dring the month of 8anary "ol Cash balance OApril 1# (995P 3#999 A. '019#999 C. '00#999 :inimm cash balance is '3#999. Cash can be borro"ed in '1#999 increments from the local ban$ Oassme no interest B . ' (30 #999 D . '  1# 39 9 chargesP. Lo" mch cash "old be collected in 8ne from sales) Acconts receivable balance xxiv A. ' 5#599 C. ' !#999 . As of 8anary 1# (995# the >iberal 7ales Company had an accont receivable B. ' !#399 D. '19#999 sales for 8anary#
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Dobtfl acconts 1J Credit sales% ovember R estimated '(#999#999   2ctober 1#!99#999 7eptember 1#499#999   Agst 1#699#999 Lo" mch is the estimated credit to Acconts &eceivable as a reslt of collections expected dring ovember) A. '1#59#(99 C. '1#54(#999 B. '1#535#(99 D. '1#!9(#999

manfactring costs in the month of ovember are% A. '1#34!#999 C. '1#440#999 B. '1#63(#999 D. '1#!34#999

,ncrease in acconts receivable xxvi . >a+aro Company "ill open a ne" store on 8anary 1. Based on experience from its other retail otlets# >a+aro is ma$ing the follo"ing sales pro;ections%

En$in% cas& #a"ance xxix . Albania Company expects its 8ne sales to be '99#999# "hich is (3J hig 'rchases "ere '(99#999 in :ay and are expected to be '(09#999 in 8ne. All and are collected as follo"s% !9J in the month of the sale and (9J in the fo payments in the month of sales are given (J discont. 7ixty percent of prcha month of prchase to ta$e advantage of prchase term of 1?19# n?09. The re paid in the follo"ing month. The beginning cash balance on 8ne 1 is '(9#999 balance on 8ne 9 "old be% A. '40# 149 C . ' !9 #40 9 B. '5#999 D. '!3#009

Cash 7ales Credit 7ales Compe&ensi(e 8anary '499#999 '099#999 Kestion os. 9 throgh  are based on the follo"ing information% a+aro estimates that 59J of the credit sales "ill be collected in the month follo"ing the month of the sale# "ith access the balancewith a free trial. Unlock full Acconts receivable collected in the second month follo"ing the sale. Based on these data# the balance in acconts receivable on 8anary 1 "ill ,nventories be increased by Acconts payable A. 099#999 C . ' 1( 9# 99 9 B. '(!9#999 D. '3!9#999 The follo"ing information are relevant to (995 operations% 7ales% Cas& $is#!sements a.  ac h m on th ’s sa le s a re b il le d o n t he l as t d ay o f t he m on t xxvii . Cascades Company# a merchandising firm# is preparing its master bdget and has gathered the follo"ing data to help bdget b. C s to me rs a re al lo "e d a  pe rc en t di sc o nt i f pa yme n cash disbrsements% after the billing date. &ecei vables are boo$ed gross. Bdgeted data% c. 7ixty percent of the billings are collected "ithin the dis Cost of goods sold '1#4!9#999 percent are collected by the end of the month# nine percent are collecte Desired decrease in inventories 59#999 second month# and six percent are considered entirely ncollectible. Desired decrease in Acconts 'ayable 139#999 All of the acconts payables are for inventory prchases and all inventory items are prchased on accont. /hat are the 'rchases% estimated cash disbrsements for inventories for the bdget period) 1.
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budgeting

 

16 x11 FinMan D

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Dobtfl acconts 1J Credit sales% ovember R estimated '(#999#999   2ctober 1#!99#999 7eptember 1#499#999   Agst 1#699#999 Lo" mch is the estimated credit to Acconts &eceivable as a reslt of collections expected dring ovember) A. '1#59#(99 C. '1#54(#999 B. '1#535#(99 D. '1#!9(#999



manfactring costs in the month of ovember are% A. '1#34!#999 C. '1#440#999 B. '1#63(#999 D. '1#!34#999

,ncrease in acconts receivable xxvi . >a+aro Company "ill open a ne" store on 8anary 1. Based on experience from its other retail otlets# >a+aro is ma$ing the follo"ing sales pro;ections%

En$in% cas& #a"ance xxix . Albania Company expects its 8ne sales to be '99#999# "hich is (3J hig 'rchases "ere '(99#999 in :ay and are expected to be '(09#999 in 8ne. All and are collected as follo"s% !9J in the month of the sale and (9J in the fo payments in the month of sales are given (J discont. 7ixty percent of prcha month of prchase to ta$e advantage of prchase term of 1?19# n?09. The re paid in the follo"ing month. The beginning cash balance on 8ne 1 is '(9#999 balance on 8ne 9 "old be% A. '40# 149 C . ' !9 #40 9 B. '5#999 D. '!3#009

Cash 7ales Credit 7ales Compe&ensi(e 8anary '499#999 '099#999 Kestion os. 9 throgh  are based on the follo"ing information% a+aro estimates that 59J of the credit sales "ill be collected in the month follo"ing the month of the sale# "ith access the balancewith a free trial. Unlock full Acconts receivable collected in the second month follo"ing the sale. Based on these data# the balance in acconts receivable on 8anary 1 "ill ,nventories be increased by Acconts payable A. 099#999 C . ' 1( 9# 99 9 B. '(!9#999 D. '3!9#999 The follo"ing information are relevant to (995 operations% 7ales% Cas& $is#!sements a.  ac h m on th ’s sa le s a re b il le d o n t he l as t d ay o f t he m on t xxvii . Cascades Company# a merchandising firm# is preparing its master bdget and has gathered the follo"ing data to help bdget b. C s to me rs a re al lo "e d a  pe rc en t di sc o nt i f pa yme n cash disbrsements% after the billing date. &ecei vables are boo$ed gross. Bdgeted data% c. 7ixty percent of the billings are collected "ithin the dis Cost of goods sold '1#4!9#999 percent are collected by the end of the month# nine percent are collecte Desired decrease in inventories 59#999 second month# and six percent are considered entirely ncollectible. Desired decrease in Acconts 'ayable 139#999 All of the acconts payables are for inventory prchases and all inventory items are prchased on accont. /hat are the 'rchases% estimated cash disbrsements for inventories for the bdget period) 1.
You're Reading a Preview

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1 8 4

ovember December 8anary
E,T7 11#!99 1(#199 11#699 11#099 1(#999 1(#(99

8anary
'727 '#309#999 #49#999 #359#999 #0(9#999 #499#999 #449#999

xxxiv

. The bdgeted cash disbrsements for the month of
xxxii

. The amont of cash collected from sales dring the month of 8anary is% A. '#!#549 C. '#090#199 B. '#331#149 D. '#334#349

xxxiii

. The nmber of nits to be prchased dring the month of :arch is% A. 13#!49 C. 1(#999 B. 1(#(49 D. 13# 499

:ay 8ne 8ly

:onthly material prchases are set e*al to (9 percent of forecasted sales for the nex material costs# 09 percent are paid in the month of prchase and 49 percent in the fol costs "ill rn '49#999 per month# and fixed overhead is '9#999 per month. ,nteres debt "ill be '03#999 for both :arch and 8ne.
. The respective amonts of bdgeted prchases for the months of 8anary and
xxxi

'1(9#999 149#999 1!9#999 (09#999

. Lo" mch "ill be paid in the month of 8anary for the prchase of materials) A . ' ( 5# (9 9 C. '15#!34 B. '115#(99 D. ' #499

xxxv

. Lo" mch does Atlanta plan to disbrse in the month of 8ne) C. '(95#(99 D. '115#(99

A . ' 0 1# 49 9 You're Reading a Preview B. '199#999

Kestion os. 4 throgh ! are based on the follo"ing%

Unlock full access with7per a free 7ales’trial. actal sales and prchases for April and :ay are sho"n here along "i and prchases for 8ne throgh 7eptember. 7ales '69#999 0(9#999 69#999 39#999 0(9#999 019#999

AprilTrial OActalP Download With Free

&a;ah nterprises is a gro"ing retailer of home care prodcts. Dring the first for months of the follo"ing year# it forecasts the follo"ing sales and prchases% 7ales 'rchases 8anary '5#(99#999 '0#(99#999
:ay OActalP 8ne OforecastP 8ly OforecastP Agst OforecastP 7eptember OforecastP

The company ma$es 19 percent of its sales for cash and 69 percent on credit. 2f percent are collected in the month after the sale and 59 percent are collected t"o m 7ales pays for 03 percent of its prchases in the month after prchase and 33 percent

>abor expense e*als 13 percent of the crrent month@s sales. Qeneral overhea '19#999 per month. ,nterest payments of '3#999 are de in 8ne and 7eptember. '(3#999 is schedled to be paid in 8ne. Tax payments of '9#999 are de in 8ne an is a schedled prchase for c ash of an e*ipment# '(69#999 in 7eptember.

7per 7ales’ ending cash balance in :ay is '(3#999. The minimm desired cash b The maximm desired cash balance is '39#999. xcess cash Oabove '39#999P is se secrities. :ar$etable secrities are sold before borro"ing fnds in case of a cash

The Atlanta Corporation has forecast the follo"ing sales for the first seven months of the year% 1 8 5

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E,T7 11#!99 1(#199 11#699 11#099 1(#999 1(#(99

ovember December 8anary
Documents Sheet Music xxx

of 17

 

8anary
'727 '#309#999 #49#999 #359#999 #0(9#999 #499#999 #449#999

. The amont of cash collected from sales dring the month of 8anary is% A. '#!#549 C. '#090#199 B. '#331#149 D. '#334#349

xxxiii

. The nmber of nits to be prchased dring the month of :arch is% A. 13#!49 C. 1(#999 B. 1(#(49 D. 13# 499

'1(9#999 149#999 1!9#999 (09#999



:ay 8ne 8ly

:onthly material prchases are set e*al to (9 percent of forecasted sales for the nex material costs# 09 percent are paid in the month of prchase and 49 percent in the fol costs "ill rn '49#999 per month# and fixed overhead is '9#999 per month. ,nteres debt "ill be '03#999 for both :arch and 8ne.
. The bdgeted cash disbrsements for the month of
xxxii

16 x11 FinMan D

 Search document

. The respective amonts of bdgeted prchases for the months of 8anary and
xxxi

budgeting

. Lo" mch "ill be paid in the month of 8anary for the prchase of materials) A . ' ( 5# (9 9 C. '15#!34 B. '115#(99 D. ' #499

xxxv

. Lo" mch does Atlanta plan to disbrse in the month of 8ne) C. '(95#(99 D. '115#(99

A . ' 0 1# 49 9 You're Reading a Preview B. '199#999

Kestion os. 4 throgh ! are based on the follo"ing%

Unlock full access with7per a free 7ales’trial. actal sales and prchases for April and :ay are sho"n here along "i and prchases for 8ne throgh 7eptember. 7ales '69#999 0(9#999 69#999 39#999 0(9#999 019#999

AprilTrial OActalP Download With Free

&a;ah nterprises is a gro"ing retailer of home care prodcts. Dring the first for months of the follo"ing year# it forecasts the follo"ing sales and prchases% 7ales 'rchases 8anary '5#(99#999 '0#(99#999
:ay OActalP 8ne OforecastP 8ly OforecastP Agst OforecastP 7eptember OforecastP

The company ma$es 19 percent of its sales for cash and 69 percent on credit. 2f percent are collected in the month after the sale and 59 percent are collected t"o m 7ales pays for 03 percent of its prchases in the month after prchase and 33 percent

>abor expense e*als 13 percent of the crrent month@s sales. Qeneral overhea '19#999 per month. ,nterest payments of '3#999 are de in 8ne and 7eptember. '(3#999 is schedled to be paid in 8ne. Tax payments of '9#999 are de in 8ne an is a schedled prchase for c ash of an e*ipment# '(69#999 in 7eptember.

7per 7ales’ ending cash balance in :ay is '(3#999. The minimm desired cash b The maximm desired cash balance is '39#999. xcess cash Oabove '39#999P is se secrities. :ar$etable secrities are sold before borro"ing fnds in case of a cash

The Atlanta Corporation has forecast the follo"ing sales for the first seven months of the year% 1 8 5

'(9#999P.

average tax rate is 09 percent# and the company sally pays ot 39 percent of net inc stoc$holders. :ar$etable secrities are sold before fnds are borro"ed "hen a cash ,gnore the interest on any short-term borro"ings. ,nterest on the long-term debt is pa taxes and dividends.

xxxvi

. Dring the month of 8ne# 7per 7ales expects to receive cash from sales amonting to% A. ' 494 #999 C. '6!#199 B. '09!#699 D. '36#199

As of year-end# the ,ngo Corporation balance sheet "as as follo"s% ,ngo Corporation Balance 7heet December 1# (994

xxxvii

. The cmlative amont of mar$etable secrities prchased as of 8ly 1 amonts to% A. '1(4#999 C. '10#99 B. 1 (# 399 D. ' 9

xxxviii

. The amont of loan to be obtained to maintain a balance of '39#999 cash as of 7eptember 9 "ill be% A. '196.0 C. ' 6.0 B. ' 36.0 D. ' 9.9

A77T7 Crrent assets% Cash Acconts receivable ,nventory Total crrent assets ' lan t a nd e* ip me nt# ne t o f ac c m lat ed dep rec iat io n of '( 99 #99 9 Total Assets

Kestion os. 6 throgh 03 are based on the follo"ing data% The ,ngo Corporation ma$es standard-si+e (-inch fasteners# "hich it sells for '133 per thosand. ,rine Tee# the ma;or stoc$holder# manages the inventory and finances of the company. 7he estimates sales for the follo"ing months to be%

You're Reading a Preview

8anary
'(4#399 '1!4#999 '(15#999 '19#999 '!5#399

O1#599#999 fastenersP O1#(99#999 fastenersP O1#099#999 fastenersP O(#999#999 fastenersP O(#399#999 fastenersP

>,AB,>,T,7 AD 7T2CSL2>D&7’ KE,TG

Unlock full access with a free trial. Acconts payable

>ong-term debt# !J Common stoc$ &etained earnings Total >iabilities and 7toc$holders’ *ity

Download With Free Trial

>ast year ,ngo Corporation@s sales "ere '153#999 in ovember and '((#399 in December O1#399#999 fastenersP.

:s. Tee is preparing for a meeting "ith 'eninsla Ban$ing Corporation to arrange the financing for the first *arter. Based on her sales forecast and the follo"ing information she has provided# yo have to prepare a monthly cash bdget# a monthly and *arterly pro forma income statement# a pro forma *arterly balance sheet# and all necessary spporting schedles for the first *arter.

xxxix

'ast history sho"s that ,ngo Corporation collects 39 percent of its acconts receivable in the normal 9-day credit period Othe month after the saleP and the other 39 percent in 49 days Ot"o months after the saleP. ,t pays for its materials 9 days after receipt. ,n general# :s. Tee li$es to $eep a t"o-month spply of inventory in anticipation of sales. ,nventory at the beginning of December "as (#499#999 nits. OThis "as not e*al to her desired t"o-month spply.P

xl

. The bdgeted prodction respective to each month of the first *arter of the comi A. 1#099#999 (#999#999 (#399#999 C. (#399#999 (#999#9 B . 1# 099 #999  ( #39 9# 99 9 (# 999# 999 D. (# 99 9# 999  1# 099 #9

.

The amont of acconts payable paid in :arch for the prchase of materials is% A. '139#999 C. '190#999 B . ' 1(9 #999 D. '19#999

xli

.

The ma;or cost of prodction is the prchase of ra" materials in the form of steel rods# "hich are ct# threaded# and finished. >ast year ra" material costs "ere '3( per 1#999 fasteners# bt :s. Tee has ;st been notified that material costs have risen# effective 8anary 1# to '49 per 1#999 fasteners. The ,ngo Corporation ses <,<2 inventory acconting. >abor costs are relatively constant at '(9 per thosand fasteners# since "or$ers are paid on a piece"or$ basis. 2verhead is allocated at '19 per thosand nits# and selling and administrative expense is (9 percent of sales. >abor expense and overhead are direct cash otflo"s paid in the month incrred# "hile interest and taxes are paid *arterly. The corporation sally maintains a minimm cash balance of '(3#999# and it pts its excess cash into mar$etable secrities. The 1 8 6

xlii

.

The expected cash collections on acconts receivable in the month of
xliii

. The cost of goods sold for the first *arter of the coming year amonts to%

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. Dring the month of 8ne# 7per 7ales expects to receive cash from sales amonting to% A. ' 494 #999 C. '6!#199 B. '09!#699 D. '36#199

As of year-end# the ,ngo Corporation balance sheet "as as follo"s% ,ngo Corporation Balance 7heet December 1# (994

. The cmlative amont of mar$etable secrities prchased as of 8ly 1 amonts to% A. '1(4#999 C. '10#99 B. 1 (# 399 D. ' 9

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average tax rate is 09 percent# and the company sally pays ot 39 percent of net inc stoc$holders. :ar$etable secrities are sold before fnds are borro"ed "hen a cash ,gnore the interest on any short-term borro"ings. ,nterest on the long-term debt is pa taxes and dividends.

xxxvi

xxxvii

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16 x11 FinMan D

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'(9#999P.

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budgeting

xxxviii

. The amont of loan to be obtained to maintain a balance of '39#999 cash as of 7eptember 9 "ill be% A. '196.0 C. ' 6.0 B. ' 36.0 D. ' 9.9

A77T7 Crrent assets% Cash Acconts receivable ,nventory Total crrent assets ' lan t a nd e* ip me nt# ne t o f ac c m lat ed dep rec iat io n of '( 99 #99 9 Total Assets

Kestion os. 6 throgh 03 are based on the follo"ing data% The ,ngo Corporation ma$es standard-si+e (-inch fasteners# "hich it sells for '133 per thosand. ,rine Tee# the ma;or stoc$holder# manages the inventory and finances of the company. 7he estimates sales for the follo"ing months to be%

You're Reading a Preview

8anary
'(4#399 '1!4#999 '(15#999 '19#999 '!5#399

O1#599#999 fastenersP O1#(99#999 fastenersP O1#099#999 fastenersP O(#999#999 fastenersP O(#399#999 fastenersP

>,AB,>,T,7 AD 7T2CSL2>D&7’ KE,TG

Unlock full access with a free trial. Acconts payable

>ong-term debt# !J Common stoc$ &etained earnings Total >iabilities and 7toc$holders’ *ity

Download With Free Trial

>ast year ,ngo Corporation@s sales "ere '153#999 in ovember and '((#399 in December O1#399#999 fastenersP.

:s. Tee is preparing for a meeting "ith 'eninsla Ban$ing Corporation to arrange the financing for the first *arter. Based on her sales forecast and the follo"ing information she has provided# yo have to prepare a monthly cash bdget# a monthly and *arterly pro forma income statement# a pro forma *arterly balance sheet# and all necessary spporting schedles for the first *arter.

xxxix

'ast history sho"s that ,ngo Corporation collects 39 percent of its acconts receivable in the normal 9-day credit period Othe month after the saleP and the other 39 percent in 49 days Ot"o months after the saleP. ,t pays for its materials 9 days after receipt. ,n general# :s. Tee li$es to $eep a t"o-month spply of inventory in anticipation of sales. ,nventory at the beginning of December "as (#499#999 nits. OThis "as not e*al to her desired t"o-month spply.P

xl

. The bdgeted prodction respective to each month of the first *arter of the comi A. 1#099#999 (#999#999 (#399#999 C. (#399#999 (#999#9 B . 1# 099 #999  ( #39 9# 99 9 (# 999# 999 D. (# 99 9# 999  1# 099 #9

.

The amont of acconts payable paid in :arch for the prchase of materials is% A. '139#999 C. '190#999 B . ' 1(9 #999 D. '19#999

xli

.

The ma;or cost of prodction is the prchase of ra" materials in the form of steel rods# "hich are ct# threaded# and finished. >ast year ra" material costs "ere '3( per 1#999 fasteners# bt :s. Tee has ;st been notified that material costs have risen# effective 8anary 1# to '49 per 1#999 fasteners. The ,ngo Corporation ses <,<2 inventory acconting. >abor costs are relatively constant at '(9 per thosand fasteners# since "or$ers are paid on a piece"or$ basis. 2verhead is allocated at '19 per thosand nits# and selling and administrative expense is (9 percent of sales. >abor expense and overhead are direct cash otflo"s paid in the month incrred# "hile interest and taxes are paid *arterly. The corporation sally maintains a minimm cash balance of '(3#999# and it pts its excess cash into mar$etable secrities. The

xlii

.

The expected cash collections on acconts receivable in the month of
xliii

. The cost of goods sold for the first *arter of the coming year amonts to%

1 8 6

A. B.

' 4 #!99 '03#499

C. '0(4#099 D. '5#099

xliv

. The total cash and mar$etable secrities as of 8anary 1 "ill be% A. ' 03# 039 C . '61 #!9 9 B. '(3#999 D. '30#039

xlv

.

The expected net income dring the first *arter of the coming year is% A. ' 6 1# 9! 9 C . ' 6 4# !0 9 B. '141#099 D. '131#!99

Kestion os. 04 throgh 0! are based on the &sson Corporation# a retailer "hose sales are all made on credit. 7ales are billed t"ice monthly# on the 19th of the month for the last half of the prior month’s sales# and on the (9th of the month for the first half of the crrent month’s sales. The terms of all sales are (?19# net 9. Based pon past experience# the collection of acconts receivable is as follo"s% /ithin the discont period 2n the 9th day Encollectible

You're Reading a Preview

!9J 1!J (J

full access with &sson’s average mar$p on its prodcts is (9J of the sales price. All sales and prchases occrUnlock niformly throghot the month. The sales vale of shipments for :ay and the forecasts for the next for months follo"% :ay OactalP '399#999 8ne 499#999 8ly 599#999 Agst 599#999 7eptember 099#999 &sson prchases merchandise for resale to meet the crrent month’s sales demand and to maintain a desired monthly ending inventory of (3J of the next month’s sales. All prchases are on credit "ith terms of net?9. &sson pays for 39J of a month’s prchases in the month of prchase and 39J in the month follo"ing the prchase.

a free trial.

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xlvi

. Lo" mch cash can &sson plan to collect in 7eptember from sales made in Agst) A. ' 5 #099 C. '099#099 B. '0#999 D. '(!9#999

xlvii

. The bdgeted peso vale of &sson’s inventory on Agst 1 "ill be A. '119#999 C. '11(#999 B. ' ! 9# 99 9 D. '199#999

xlviii

. Lo" mch cash can &sson plan to collect from acconts receivable dring 8ly) A. '350#999 C. '416#999 B. ' 44( #499 D. '49!#499 1 8 7

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' 4 #!99 '03#499

of 17

 

budgeting

16 x11 FinMan D

 Search document



C. '0(4#099 D. '5#099

xliv

. The total cash and mar$etable secrities as of 8anary 1 "ill be% A. ' 03# 039 C . '61 #!9 9 B. '(3#999 D. '30#039

xlv

.

The expected net income dring the first *arter of the coming year is% A. ' 6 1# 9! 9 C . ' 6 4# !0 9 B. '141#099 D. '131#!99

Kestion os. 04 throgh 0! are based on the &sson Corporation# a retailer "hose sales are all made on credit. 7ales are billed t"ice monthly# on the 19th of the month for the last half of the prior month’s sales# and on the (9th of the month for the first half of the crrent month’s sales. The terms of all sales are (?19# net 9. Based pon past experience# the collection of acconts receivable is as follo"s% /ithin the discont period 2n the 9th day Encollectible

You're Reading a Preview

!9J 1!J (J

full access with &sson’s average mar$p on its prodcts is (9J of the sales price. All sales and prchases occrUnlock niformly throghot the month. The sales vale of shipments for :ay and the forecasts for the next for months follo"% :ay OactalP '399#999 8ne 499#999 8ly 599#999 Agst 599#999 7eptember 099#999 &sson prchases merchandise for resale to meet the crrent month’s sales demand and to maintain a desired monthly ending inventory of (3J of the next month’s sales. All prchases are on credit "ith terms of net?9. &sson pays for 39J of a month’s prchases in the month of prchase and 39J in the month follo"ing the prchase.

a free trial.

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xlvi

. Lo" mch cash can &sson plan to collect in 7eptember from sales made in Agst) A. ' 5 #099 C. '099#099 B. '0#999 D. '(!9#999

xlvii

. The bdgeted peso vale of &sson’s inventory on Agst 1 "ill be A. '119#999 C. '11(#999 B. ' ! 9# 99 9 D. '199#999

xlviii

. Lo" mch cash can &sson plan to collect from acconts receivable dring 8ly) A. '350#999 C. '416#999 B. ' 44( #499 D. '49!#499 1 8 7

i

. Ans"er% A The amont of fixed costs in operating branches’ 19 "arehoses is '099#999 Othe fixed cost line inter vertical axisP. Total operating costs '(#699#999 >ess fixed costs 099#999 Total variable costs O19 "arehosesP '(#399#999 ariable costs per branch% '(#399#999 ÷ 19 ' (39#999

ii

.

iii

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Ans"er% A Cost of nits sold O9.43 x '!99#999P Add Desired ending inventory Total cost of goods available for sale Dedct Beginning inventory Bdgeted prchases

'3(9#999 109#999 449#999 19#999 '39#999

Ans"er% A Cost of goods sold Add nding ,nventory Total available for sale Dedct Beginning inventory Bdgeted prchases#
'039#999 (09#999 '469#999 ((3#999 '043#999

Ans"er% D Cost of sales Add Desired ending inventory Total available for sale D d tB d t d h

'539#999 x 9.4 '!99#999 x 9.4 x 9.3 '039#999 x 9.3

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'1(9#999  Not useful 0(#999 14(#999 199 999

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Capital Budgeting

1

of 17

 

budgeting

16 x11 FinMan D

 Search document



i

. Ans"er% A The amont of fixed costs in operating branches’ 19 "arehoses is '099#999 Othe fixed cost line inter vertical axisP. Total operating costs '(#699#999 >ess fixed costs 099#999 Total variable costs O19 "arehosesP '(#399#999 ariable costs per branch% '(#399#999 ÷ 19 ' (39#999

ii

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iii

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Ans"er% A Cost of nits sold O9.43 x '!99#999P Add Desired ending inventory Total cost of goods available for sale Dedct Beginning inventory Bdgeted prchases

'3(9#999 109#999 449#999 19#999 '39#999

Ans"er% A Cost of goods sold Add nding ,nventory Total available for sale Dedct Beginning inventory Bdgeted prchases#
'039#999 (09#999 '469#999 ((3#999 '043#999

'539#999 x 9.4 '!99#999 x 9.4 x 9.3 '039#999 x 9.3

Ans"er% D Cost of sales Add Desired ending inventory Total available for sale Dedct Bdgeted prchases Beginning inventory

'1(9#999 0(#999 14(#999 199#999 ' 4(#999

Ans"er% A Total payments for prchases in 8ne Dedct payments applicable to prchase of% 8ne O'199#999 You're x 9.4P Reading a Preview '49#999 :ay O'(99#999 x 9.9P 49#999 Unlock full access with a free trial. 'ayments applicable to April prchase Credit prchase in April% '(9#999 ÷ 9.19

Download With Free Trial

"i

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Ans"er% C Bdgeted sales# ess Beginning
9J x 149#999

O001#999 x 1.93 x 9.!P

1(9#999 ' (9#999 '(99#999

1(9#999 nits 0!#999 nits 14!#999 nits 4#999 nits 1(#999 nits

Ans"er% C 7ales for three-month period% 8ly Agst 099#999 x 1.93 7eptember 0(9#999 x 1.93 Total ,nventory# 7eptember 9 Total &e*irements >ess 8ly ,nventory Bdgeted 'rodction

'109#999

099#999 0(9#999 001#999 1#(41#999 Sign up to vote on this title 59#009

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Useful 1#41#009  Not useful

99#999 1#1#009

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Capital Budgeting

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budgeting

 Search document

Bdgeted sales in nits Add
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Ans"er% D &e*ired ponds by prodction nding ra" materials re*ired Beginning ra" materials Bdgeted prchases

1!9#999 49#999 O 9#999P (19#999

Ans"er% B :aterials re*ired by 8ne prodction 1#99 x ( Add nding ra" materials inventory 1#499 x ( x 9.3 Total materials re*ired Dedct Beginning materials inventory 1#99 x ( x 9.3 :aterials to be prchased

(#499 1#499 0#(99 1#99 (#699

Ans"er% D Bdgeted sales Add
1!#999 11#099 (6#099 13#999 10#099 4#999 (0#099 1(9#099 (1#999 66#099

You're Reading a Preview Ans"er% D &a" materials re*ired by 8ne prodction% 1#(99 x ( Unlock full access with a free trial. Add% nding materials inventory 1#99 x ( . 1.3 Total materials re*ired Dedct Beginning material inventory Download(#099 1.3 Trial Withx Free Bdgeted materials prchase

99#999 19#999 (69#999

:aterial K re*ired by prodction (69#999 x  >ess decrease in :aterial K inventory 49#999 R !9#999 Bdgeted prchase in ponds# :aterial K

!59#999 (9#999 !39#999

399#999 x ( O39#999 R 09#999P

1#999#999 19#999 1#919#999 Sign up to vote on this title

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(#099 #699 4#99 #499 (#599

Ans"er% A Bdgeted sales >ess decrease in
Ans"er% B :aterials re*ired by prodction ,ncreased in materials inventory 'rchases

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409#999 69#999 59#999 19!#999 4((#999

&a" materials re*ired by prodction O10#099 x 4 ÷ 9.6P Desired &a" materials inventory end Total Dedct &a" materials inventory# beginning Bdgeted prchase of ra" materials $iii

16 x11 FinMan D

Ans"er% B :aterials re*ired by (nd Karter’s prodction

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03#999 x (.3 $gs.

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Capital Budgeting

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O'0(9#999 x 9.! x 9.5P O'99#999 x 9.! x 9.(3P O'(09#999 x 9.! x .93P

Ans"er% B Total cash collections Dedctions collections on 7eptember sales Collections applicable to 8ly and Agst sales Credit sales in 8ly% '6#999 ÷ ( ÷ 9.13

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O'09#999 x 9.49P O'39#999 x 9?09P

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Ans"er% B 2ctober 69#999 x .63 ovember 199#999 x .!3 December !3#999 x .59
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Ans"er% D Collections from% 8anary sales O'!49#999 x 9.! x 9.53P December sales O8anary 1 AccontsP Collections of credit sales Cash sales O'!49#999 x 9.(P Total cash received Ans"er% A Collections sales of% 8ne% :ay% Total collections from sales

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' 59#999 (90#999 5#399 (9#999 '1#399

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. Ans"er% B The balance of Acconts &eceivable# based on the collection pattern for >iberal 7ales Company# e*als 09 credit sales for that month% '1#399#999 x 9.! x 9.0  '0!9#999

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Ans"er% C Qross receivable collected month’s sales ovember (#999#999 x .1( 2ctober 1#!99#999 x .53 7eptember 1#499#999 x .94 Agst 1#699#999 x .90 Total credit

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 Useful  Not useful . Ans"er% A The balance of Acconts &eceivable as of 8anary 1# its first month of operations# "ill increase by ' becase the first collection on accont sales "ill be in
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Capital Budgeting

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budgeting

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Total disbrsements $$i$

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Ans"er% B Bdgeted :arch sales Add% nding inventory nits Total nits re*ired >ess% Beginning inventory nits Bdgeted prchases in nits# :arch

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Ans"er% A 'ayments for prchases in the month of% December O9.( x '1(9#999 x 9.4P 8anary O9.( x '149#999 x 9.0P Total 8anary disbrsements for prchases Ans"er% C 'ayments for prchases% :ay prchase   8ne prchase

'(#11(#449 695#399 1!#499 '#!#549

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 O9.( x '(99#999 x 9.4P O9.( x '((9#999 x 9.0P

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 Not useful '(0#999 15#499

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Capital Budgeting

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budgeting

16 x11 FinMan D

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Ans"er% B :ar$etable secrities prchased on%   8ne 8ly Cmlative prchase of :7

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. Ans"er% A Cash Bdget O'’999P 8ne8lyAg7eptCash receipts'6!.1'090.6'!(.('50.6Cash disbrsements 45.3 (5!.9 (64.3 59(.3et Ootflo"P 9.4 1(4.6 !3.5O (5.4PBeginning cash balance (3.9 39.9 39.9 39.9Cmlative cash bala 154.6 13.5O (55.4P:?7 sold OprchasedP - 3.4- 1(4.6- !3.5 (1!.(Cash loan 9.9 9.9 9.9 balance# end' 39.9' 39.9' 3 Cash &eceipts O'’999P 8ne8lyAg7eptAccont sales O69JP'31.9'13.9'5!.9'46.9Cash sales' 6.9' 3.9' 0(.9' 01.9Co acconts abor 3!.3 3(.3 4.9 overhead 19.9 19.9 19.9 19.9,nterest 3.9 3.9Cash dividend (3.9Taxes 9.9 9.9'rchase (69.9Total payments'45.3'(5!.9'(6 $$$i$ . Ans"er% A Bdgeted 'rodction 8anary
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Ans"er% A Crrent nit cost per 1#999 :aterial >abor 2verhead Total

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ffective 8anary 1# (995# the price of materials "ill be raised to '49. The nit cost for (995 prodction "i  Useful  Not useful 7ince the sales of 8anary and
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Capital Budgeting

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budgeting

16 x11 FinMan D

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'roforma ,ncome 7tatement 8anary
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Ans"er% D :ay sales billed 8ne 19 (39#999x1!J 8ne 7ales% Billed 8ne (9 99#999 x 1!J Billed 8ly 19 99#999 x .!9 + .6! 8ly sales Billed 8ly (9 '39#999 x .!9 x .6! 8ly Collections

' 03#999 30#999 (3#(99 '(50#099 '49!#499

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