Question

In: Accounting

1.Which of the following budgets comes after the production budget but before the cash budget?. Single...

1.Which of the following budgets comes after the production budget but before the cash budget?. Single choice.

A. Sales budget

B. Material purchases budget

C. Budgeted balance sheet

D. Budgeted income statement

2.Which of the following is NOT usually a way to estimate future sales?. Single choice.

A. Trends in the company’s sales data

B. Estimates from the company’s salespersons

C. Sales are estimated based on expected costs

D. Mathematical models adjusted by an experienced manager using professional judgment

3.A company expects to sell 15,000 units in the first quarter, 18,000 units in the second quarter, and 20,000 units in the third quarter. The company desires to maintain an inventory at the end of each quarter equal to 10% of next quarter expected sales. How many units does the company plan to produce in the second quarter?. Single choice.

A. 2,000

B. 20,000

C. 18,150

D. 18,200

Solutions

Expert Solution

1)

Sequence of budget is as follows:

First – Sales Budget

Second – Production Budget

Third – Material purchases budget

Hence, the correct option is B. Material purchases budget

2)

The correct option is C. Sales are estimated based on expected costs

A. Trends in the company’s sales data – Trend analysis is used to estimate future sales

B. Estimates from the company’s salespersons – This is also an estimation of sales

D. Mathematical models adjusted by an experienced manager using professional judgment – This is also an method to estimate sales.

3)

Units to be produced in second quarter

Second Quarter

Estimated Sales Unit

18,000

Plus: Desired Ending Inventory (10%*20,000)

2000

Total Needs

20,000

Less: Estimated Beginning Inventory
(18,000*10%)

1800

Budgeted Production Units

18,200

The correct option is D. 18,200

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ekkarill92 answered 1 year ago
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