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Exam 8: The Master Budget

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Question 71

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Which of the following items should not be included in a company's budget manual?

A) sample budgetary forms
B) a statement of desired results of the budget
C) a listing of budgetary activities to be performed
D) financial statements for the upcoming fiscal year

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Question 72

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Shown below are the totals from period budgets of Swanson Corporation for the current year: $\begin{array}{ll}\text{Revenue budget}&\$ 100,000 \\\text{Materials usage from production budget}&15,000 \\\text{Labor cost budget}&20,000 \\\text{Manufacturing overhead budget}&20,000 \\\text{General and administrative budget}&30,000 \\\text{Capital expenditure budget}&20,000 \\\text{Work in Progress Inventories:}&\\\text{Beginning of Year}&10,000 \\\text{End of Year}&5,000 \\\text{Finished Goods Inventory:}&\\\text{Beginning of Year}&15,000 \\\text{End of Year}&10,000\\\text {Tex Rate }&40\%\end{array}$ Required: Prepare a forecasted Income Statement for the current year:

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Question 73

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Measuring the firm's performance against established objectives is part of which of the following functions?

A participatory budget is developed by both top management and operating personnel.

The budgeted cost of products to be sold in a future period would be found in the

A calendar of scheduled budgetary activities helps to coordinate the budgeting process.

In a manufacturing organization,the cash budget is prepared immediately after the sales budget.

The budget is an important source of feedback for an organization.

An example of a recurring short-term plan is

Which of the following is usually perceived as being the master budget's greatest advantage to management?

For the month of November,Hopkins Corporation.predicts total cash collections to be $1 million.Also for November,Hopkins Corporation.estimates that its beginning cash balance will be $50,000 and that it will borrow cash in the amount of $70,000.If Hopkins Corporation.estimates an ending cash balance of $30,000 for November,what must its projected cash disbursements be?

Norman Medical Center has provided you with the following budget information for July: $\begin{array}{ll}\text { Cash collections } & \$ 918,000 \\\text { July } 1 \text { cash balance } & 32,000 \\\text { Cash disbursements } & 1,020,400\end{array}$ Norman has a policy of maintaining a minimum cash balance of $30,000 and borrows only in $1,000 increments.How much will Norman borrow in July?

The primary reason that managers impose a minimum cash balance in the cash budget is

A continuous budget is prepared by adding a new budget month as each month expires.

Channing Company Channing Company is preparing its Manufacturing Overhead budget for the second quarter of the year.Budgeted variable factory overhead is $3.00 per unit produced; budgeted fixed factory overhead is $75,000 per month,with $16,000 of this amount being factory depreciation. Refer to Channing Company.If the budgeted production for April is 6,000 units,then the total budgeted factory overhead for April is:

The master budget usually includes

Budgeted sales for the first six months for Shelton Corp.are listed below: $\begin{array}{lllllll}&JANUARY&FEBRUARY&MARCH&APRIL&MAY&JUNE\\\hlineUNITS:&5,000&6,000&9,000&8,000&6,000&5,000\end{array}$ Shelton Corp.has a policy of maintaining an inventory of finished goods equal to 30 percent of the next month's budgeted sales.If Shelton Corp.plans to produce 8,000 units in June,what are budgeted sales for July?

A budget that indicates the funds to be generated or consumed during the period is referred to as a ______________________________.

The financial budget is prepared before the operating budget.

Depreciation on the production equipment would appear in which of the following budgets?