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Exam 5: Planning and Forecasting

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Question 91

Multiple Choice

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Sophia,Inc.is preparing its cash budget for the fourth quarter.The inventory manager advises that materials purchases will be $40,000 in October and will increase by 25% for each month thereafter due to the holiday season.Sophia's purchases in September were $32,000.Sophia pays for purchases 50% in the month after sale and 50% in the 2nd month after the sale.What are Sophia's budgeted cash payments for purchases in November?

A) $45,000
B) $36,000
C) $61,000
D) $40,000

E) A) and B)
F) None of the above

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Question 92

Multiple Choice

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Copper,Inc.'s intern was working on the cash budget for May.The intern was called away suddenly for a family emergency.Copper's beginning inventory was $12,600 and its ending inventory was $12,000.If cost of goods sold is 55% of sales,what was the amount of budgeted monthly sales if necessary,round your answer to the nearest dollar?

A) $350,000
B) $243,000
C) $240,818
D) $73,508

E) B) and C)
F) A) and D)

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Question 93

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Phillip Co.manufactures decorative pillows designed for use on outdoor patios.Phillip requires that 30 percent of next month's sales be on hand at the end of each month.The following information is available regarding budgeted sales of pillows: What is budgeted production for May?

Deviations from the budget may occur because of

Gross profit on a pro-forma income statement is calculated as

Pro-forma financial statements are prepared based on assumed rather than actual results.

A company is preparing its cash budget for the first quarter of the year.It has $8,000 in cash at the beginning of the period.Cash sales for the quarter are budgeted at $180,000.Selling and administrative expenses are budgeted at $58,000,which includes $12,000 depreciation.Cash expenses are paid in the month incurred.Cash payment for inventory purchases are budgeted at $135,000.The desired cash balance on March 31 is $10,000.How much financing will the company need during the quarter?

The position responsible for negotiating a volume discount would be

A budget is an operating plan that may be expressed in either financial or non-financial terms.

Jody Jewelry manufactures jewelry.In October Jody is planning to make 500 rings,400 bracelets,and 210 pendants.The company expects the total manufacturing overhead for the year would be $3,450,000 and that total direct labor hours for the year would be 75,000.Actual overhead incurred for October was $295,920.Each ring requires 6.25 hours of labor to manufacture; each bracelet requires 5.5 hours of labor to manufacture,and each pendant requires 4 hours of labor to manufacture.What is the standard overhead cost per bracelet?

Which of the following is not a component of the Cash Budget?

To determine the cash payments for direct materials during a period,companies prepare a

Julie Finn is preparing the materials purchases budget for the second quarter.The production manager has provided the following production budget information: January - 60,000

The predetermined overhead rate is calculated as Budgeted Total Manufacturing Overhead divided by Budgeted Activity Level of Application Base.

Total budgeted manufacturing overhead flows to the

A company is preparing its cash budget for the first quarter of the year.It has $1,000 in cash at the beginning of the period.Cash sales for the quarter are budgeted at $30,000.Selling and administrative expenses are budgeted at $8,000,which includes $2,000 depreciation.Cash expenses are paid in the month incurred.Cash payment for inventory purchases are budgeted at $25,000.The desired cash balance on March 31 is $5,000.How much financing will the company need during the quarter?

The formula for the production budget is Budgeted Sales + Budgeted Beginning Inventory - Budgeted Ending Inventory = Budgeted Production.

Preparing a budget allows managers to

Which of the following items would most likely differ on the Cash Budget and the Budgeted Income Statement?

The amounts to be included in the standard price of direct labor is generally provided by