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Exam 9: Reporting and Analyzing Long-Lived Assets

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Question 71

Multiple Choice

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Kam Department Store reported the following information for 2013: $\begin{array}{llll}&\text { October }&\text {November }&\text {December }\\\text { Budgeted sales } & \$ 1,240,000 & \$1,160,000 & \$ 1,440,000 \\\end{array}$ All sales are on credit. -Customer amounts on account are collected 50% in the month of sale and 50% in the following month. How much cash will Kam receive in November?

A) $580,000
B) $1,300,000
C) $1,200,000
D) $1,160,000

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

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Question 72

Multiple Choice

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Dolce Co.estimates its sales at 180,000 units in the first quarter and that sales will increase by 18,000 units each quarter over the year.They have, and desire, a 25% ending inventory of finished goods.Each unit sells for $25.40% of the sales are for cash.70% of the credit customers pay within the quarter.The remainder is received in the quarter following sale. -Cash collections for the third quarter are budgeted at

A) $3,051,000.
B) $4,428,000.
C) $5,319,000.
D) $6,156,000.

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

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Question 73

Multiple Choice

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Which one of the following is not a benefit of budgeting?

Top management notices a variation from budget and an investigation of the difference reveals that the department manager could not be expected to have controlled the variation.Which of the following statements is applicable?

A benefit of budgeting is that it provides definite objectives for evaluating performance.

The budget committee has the responsibility for coordinating the preparation of the budget.

A common starting point in the budgeting process is

The longer the budget period, the more reliable the estimates of future outcomes.

In a production budget, total required production units are the budgeted sales units plus

A well-developed budget can operate and enforce itself.

A company has budgeted direct materials purchases of $300,000 in July and $480,000 in August.Past experience indicates that the company pays for 70% of its purchases in the month of purchase and the remaining 30% in the next month.During August, the following items were budgeted: $\begin{array} { l r } \text { Wages Expense } & \$ 150,000 \\\text { Purchase of office equipment } & 72,000 \\\text { Selling and Administrative Expenses } & 48,000 \\\text { Depreciation Expense } & 36,000\end{array}$ The budgeted cash disbursements for August are

The production budget shows expected unit sales are 100,000.The required production units are 104,000.What are the beginning and desired ending finished goods units, respectively? $\begin{array} { l c c } & \text { Beginning Units } & \text { Ending Units } \\\text { a. } & 10,000 & 6,000 \\\text { b. } & 6,000 & 10,000 \\\text { c. } & 4,000 & 10,000 \\\text { d. } & 10,000 & 4,000\end{array}$

The culmination of preparing operating budgets is the

The single most important output in preparing financial budgets is the

A budget

Lorie Nursery plans to sell 320 potted plants during April and 240 units in May.Lorie Nursery keeps 15% of the next month's sales as ending inventory.How many units should Lorie Nursery produce during April?

Teller Co.is planning to sell 900 boxes of ceramic tile, with production estimated at 870 boxes during May.Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor.Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour.Manufacturing overhead is applied at a rate of 110% of direct labor costs.Teller has 3,900 pounds of clay mix in beginning inventory and wants to have 4,500 pounds in ending inventory. -What is the total amount to be budgeted for manufacturing overhead for the month?

Teller Co.is planning to sell 900 boxes of ceramic tile, with production estimated at 870 boxes during May.Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor.Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour.Manufacturing overhead is applied at a rate of 110% of direct labor costs.Teller has 3,900 pounds of clay mix in beginning inventory and wants to have 4,500 pounds in ending inventory. -What is the total amount to be budgeted in pounds for direct materials to be purchased for the month?

Accounting generally has the responsibility for

The most common budget period is