In: Accounting
1) What is the correct order in which the following budget schedules are prepared? Direct materials purchases Production Direct labor Sales Manufacturing overhead (5pts)
a. 2,1,5,3,4
b. 4,2,1,3,5
c. 2,3,1,4,5 d.
4,1,5,3,2
e. None of the answer choices is correct.
2) Garibaldi Inc. collects 40% of its sales in the month of sale and the other 60% in the following month. The following shows budgeted sales for October through December.
October $3,900,000
November $4,350,000
December $4,725,000
What is the amount of cash receipts budgeted for November? (5pts)
a. $4,080,000
b. $1,740,000
c. $2,340,000
d. $2,835,000
None of the answer choices is correct.
3) Miller Inc. had the following sales during 2016:
Quarter 1 10,000 units
Quarter 2 11,000 units
Quarter 3 14,000 units
Quarter 4 12,000 units
Miller expects sales in each quarter of 2013 to be 10% more than the respective quarters for 2016. If each unit sells for $110, what amounts will appear as sales revenue in the quarterly sales budgets for 2013? (5pts)
a. $990,000; $1,089,000; $1,386,000; $1,188,000
b. $1,100,000; $1,210,000; $1,540,000; $1,320,000
c. $1,421,750; $1,421,750; $1,421,750; $1,421,750
d. $1,210,000; $1,331,000; $1,694,000; $1,452,000
e. None of the answer choices is correct.
4) Which of the following best describes a master budget? (5pts)
a. An estimate of cash expenditures for long-term assets.
b. An estimate of all operating costs other than production.
c. A long-term budget that focuses on the daily operations of the organization.
d. A series of budget schedules outlining the organization's plans for the upcoming period.
e. None of the answer choices is correct.
8)Which of the following remains the same when comparing a flexible budget to a master budget?(5pts)
a. Total sales.
b. Net income.
c. Total variable costs.
d. Total fixed costs.
e. None of the answer choices is correct.
Solution 1:
Correct order of budget schedules:
4. Sales budget, 2. Production, 1. Direct Material purchases, 3. Direct Labor, 5. Manufacturing Budget.
Hence correct order is 4,2,1,3,5 and option "b" is correct.
Solution 2:
Cash receipts budgeted for November = Sales of October*60% + Sales of November*40%
= $3,900,000*60% + $4,350,000*40% = $2,340,000 +$1,740,000 = $4,080,000
Hence option "a" is correct.
Solution 3:
Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | |
Sales units During 2016 | 10000 | 11000 | 14000 | 12000 |
Expected sale units during 2017 (10% higher) | 11000 | 12100 | 15400 | 13200 |
Sales price per unit | $110.00 | $110.00 | $110.00 | $110.00 |
Sales Revenue in quarterly sales budget | $12,10,000.00 | $13,31,000.00 | $16,94,000.00 | $14,52,000.00 |
Hence option "d" is correct.
Solution 4:
"A series of budget schedules outlining the organization's plans for the upcoming period" best describes a Master Budget.
Hence option "d" is correct.
Solution 5:
Total Fixed assets remains the same when comparing a flexible budget to a master budget.
Hence option "d" is correct.