ON(42 points Required: Please answer any 21 of the following 28 multiple choice
ID: 2574234 • Letter: O
Question
ON(42 points Required: Please answer any 21 of the following 28 multiple choice questions and record your answers by letter on the separately than 21 questions as only your first 21 answers will be graded. Only the ANSWER SHEET FOR SECTION 4 will be graded for this section of the exam. ANSWER SHEET FOR SECTION 4. Do not answer more 1. Why are budgets useful in the planning process? a. They provide management with information about the company's past performance. b. They help communicate goals and provide a basis for evaluation. c. They guarantee the company will be profitable if it meets its objectives. d. They enable the budget committee to earn their paycheck. Which of the following statements about budget acceptance in an organization is true? a. The most widely accepted budget by the organization is the one prepared by top 2. management b. The most widely accepted budget by the organization is the one prepared by the c. Budgets are hardly ever accepted by anyone except top management. d. Budgets have a greater chance of acceptance if all levels of management have provided input into the budgeting process. Which is the last step in developing the master budget? a. Preparing the budgeted balance sheet b. 3. Preparing the cost of goods manufactured budget c. Preparing the budgeted income statement d. Preparing the cash budget The starting point in preparing a master budget is the preparation of the a. production budget b. sales budget. c. purchasing budget. d. personnel budget 4. 5. 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. 6 Garnett Co. expects to purchase $180,000 of materials in July and $210,000 of materials in August. Three-fourths of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase. How much will August's cash disbursements for materials purchases be? a. $135,000 b. $157,500 c. $202,500 d. $210,000 7. What is the proper preparation sequencing of the following budgets? 1. Budgeted Balance Sheet 2. Sales Budget 3. Selling and Administrative Budget 4. Budgeted Income Statement a. 1, 2, 3, 4 b. 2, 3, 1, 4 c. 2, 3, 4,1 d. 2, 4, 1, 3 PAGE 3Explanation / Answer
1. b. They help communicate goals and provide a basis for evaluation
2. d. Budgets have a greater chance of acceptance if all levels of management have provided input into the budgeting process.
3. a.preparing the budgeted balance sheet
4. b Sales Budget
5. (180,000 +18,000 +18,000) x $25 x 40% + (180,000 +18,000 +18,000) x $25 x 60% x 70% + (180,000 +18,000) x $25 x 60% x 30% = $5,319,000
6. c. $202,500
7. 1) Sales Budget 2) Selling and Administrative Budget 3) Budgeted Income Statement 4) Budgeted Balance Sheet
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