95. Which of the following is a financial budget?
96. Which of the following is NOT a component of the Cash Budget?
97. Which of the following is a financial budget?
98. Mikhail Corporation has the following sales forecasts for the first three months of 2014:
Month
Sales
January
$36,000
February
24,000
March
40,000
Sixty-five percent of sales are collected in the month of the sale and the remainder are collected in the following month. Mikhail will borrow from its
bank to maintain its minimum cash balance.
Accounts receivable balance (January 1, 2014)
$16,000
Cash balance (January 1, 2014)
12,000
Minimum cash balance needed
20,000
What is the cash balance at the end of January, assuming that cash is received only from customers and that $48,000 is paid out during January?
99. Mikhail Corporation has the following sales forecasts for the first three months of 2014:
Month
Sales
January
$36,000
February
24,000
March
40,000
Sixty-five percent of sales are collected in the month of the sale and the remainder are collected in the following month.
Accounts receivable balance (January 1, 2014)
$16,000
Cash balance (January 1, 2014)
12,000
Minimum cash balance is $20,000. Cash can be borrowed in $1,000 increments from the local bank (assume no interest charges). How much cash
would be collected in March from sales?
100. Figure 8-4
Discus Productions needs to know its anticipated cash inflows for the next quarter by month. Cash sales are 10
percent of total sales each month. Historically, sales on account have been collected as follows: 60 percent in
the month of sale, 30 percent in the month after the sale, and the remaining 10 percent two months after the sale.
Sales for the quarter are projected as follows: April, $120,000; May, $100,000; and June, $80,000. Accounts
receivable on March 31 were $60,000.
Refer to Figure 8-4. The expected cash collections of Discus Productions for June are
101. Figure 8-4
Discus Productions needs to know its anticipated cash inflows for the next quarter by month. Cash sales are 10
percent of total sales each month. Historically, sales on account have been collected as follows: 60 percent in
the month of sale, 30 percent in the month after the sale, and the remaining 10 percent two months after the sale.
Sales for the quarter are projected as follows: April, $120,000; May, $100,000; and June, $80,000. Accounts
receivable on March 31 were $60,000.
Refer to Figure 8-4. Discus Productions would expect to have an accounts receivable balance on June 30 of
102. Shiller Corporation has the following sales forecasts for the selected three-month period in 2014:
Month
Sales
July
$24,000
August
14,000
September
16,000
All sales are on account. Seventy percent of sales are collected in the month of the sale, and the remainder are collected in the following month.
Accounts receivable balance (July 1, 2014)
$20,000
Cash balance (July 1, 2014)
10,000
Minimum cash balance is $10,000. Cash can be borrowed in $1,000 increments from the local bank (assume no interest charges).
How much cash would be collected in September from sales?
103. Shiller Corporation has the following sales forecasts for the selected three-month period in 2014:
Month
Sales
July
$24,000
August
14,000
September
16,000
All sales are on account. Seventy percent of sales are collected in the month of the sale, and the remainder are collected in the following month.
Accounts receivable balance (July 1, 2014)
$20,000
Cash balance (July 1, 2014)
10,000
Minimum cash balance is $10,000. Cash can be borrowed in $1,000 increments from the local bank (assume no interest charges).
What is the cash balance at the end of July, assuming that cash is received only from customers and that $40,000 is paid out during July?
104. Natasha Company has a sales budget for next month of $150,000. Cost of goods sold is expected to be 40
percent of sales. All goods are purchased in the month used and paid for in the month following purchase. The
beginning inventory of merchandise is $5,000, and an ending inventory of $6,000 is desired. Beginning
accounts payable is $38,000.
For Natasha Company, the ending accounts payable should be
105. Quicksand Corporation has a sales budget for next month of $50,000. Cost of goods sold is expected to be
60 percent of sales. All goods are purchased in the month used and paid for in the month following their
purchase. The beginning inventory of merchandise is $1,500 and an ending inventory of $2,000 is desired.
Beginning accounts payable is $13,000.
The ending accounts payable for Quicksand Corporation should be
106. Figure 8-5
The following forecasted sales pertain to Spyware Corporation:
Month
Sales
September
$40,000
October
50,000
November
30,000
December
20,000
Collection pattern:
65 percent in month of sale
35 percent in month following sale
Accounts receivable as of August 31
$7,000
Finished goods inventory as of August 31
1,500 units
Spyware Corporation has a selling price of $2.50 per unit and expects to maintain ending inventories equal to 25 percent of the next month’s sales.
Refer to Figure 8-5. How many dollars are expected to be collected in September?
107. Refer to Figure 8-5. How many dollars are expected to be collected in December?
108. Figure 8-6
The records of Morgantown, Inc.show the following forecasted sales:
Month
Sales
September
$400,000
October
500,000
November
300,000
December
200,000
Collection pattern:
60 percent in month of sale
40 percent in month following the sale
Accounts receivable as of August 31
$70,000
Finished goods inventory as of August 31
8,000 units
The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 20 percent of next month’s sales.
Refer to Figure 8-6. How many dollars are expected to be collected in October?
109. Figure 8-6
The records of Morgantown, Inc.show the following forecasted sales:
Month
Sales
September
$400,000
October
500,000
November
300,000
December
200,000
Collection pattern:
60 percent in month of sale
40 percent in month following the sale
Accounts receivable as of August 31
$70,000
Finished goods inventory as of August 31
8,000 units
The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 20 percent of next month’s sales.
Refer to Figure 8-6. How much is Accounts Receivable as of October 31?
110. Firefly Manufacturing Company needs to know its anticipated cash inflows for the next quarter by month.
Cash sales are 20 percent of total sales each month. Historically, sales on account have been collected as
follows: 50 percent in the month of the sale, 35 percent in the month after the sale, and the remaining 15 percent
two months after the sale. Sales for the quarter are projected as follows: January, $60,000; February, $30,000;
and March, $90,000.
Accounts receivable on December 31 were $45,000.
The expected cash collections of Firefly Manufacturing Company for March are
111. Firefly Manufacturing Company needs to know its anticipated cash inflows for the next quarter by month.
Cash sales are 20 percent of total sales each month. Historically, sales on account have been collected as
follows: 50 percent in the month of the sale, 35 percent in the month after the sale, and the remaining 15 percent
two months after the sale. Sales for the quarter are projected as follows: January, $60,000; February, $30,000;
and March, $90,000.
Accounts receivable on December 31 were $45,000.
Firefly Manufacturing Company would expect to have an accounts receivable balance on March 31 of
112. Figure 8-7
Macheski Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master
budget. Data for the July master budget are given below:
The June 30th balance sheet follows:
Cash
$ 25,000
Accounts payable
$ 45,000
Accounts receivable
110,000
Capital stock
300,000
Inventory
54,000
Retained earnings
94,000
Building and equipment (net)
250,000
Actual sales for June and budgeted sales for July, August, and September are given below:
June
$137,500
July
360,000
August
400,000
September
320,000
Sales are 20 percent for cash and 80 percent on credit. All credit sales are collected in the month following the sale. There are no bad debts.
The gross margin percentage is 40 percent of sales. The desired ending inventory is equal to 25 percent of the following month’s sales. One fourth of
the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month.
The monthly cash operating expenses are $43,000, and the monthly depreciation expenses are $7,000.
Refer to Figure 8-7. What is the balance of the accounts receivable at the end of July?
113. Figure 8-7
Macheski Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master
budget. Data for the July master budget are given below:
The June 30th balance sheet follows:
Cash
$ 25,000
Accounts payable
$ 45,000
Accounts receivable
110,000
Capital stock
300,000
Inventory
54,000
Retained earnings
94,000
Building and equipment (net)
250,000
Actual sales for June and budgeted sales for July, August, and September are given below:
June
$137,500
July
360,000
August
400,000
September
320,000
Sales are 20 percent for cash and 80 percent on credit. All credit sales are collected in the month following the sale. There are no bad debts.
The gross margin percentage is 40 percent of sales. The desired ending inventory is equal to 25 percent of the following month’s sales. One fourth of
the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month.
The monthly cash operating expenses are $43,000, and the monthly depreciation expenses are $7,000.
Refer to Figure 8-7. What is the balance of the accounts payable at the end of July?
114. Figure 8-7
Macheski Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master
budget. Data for the July master budget are given below:
The June 30th balance sheet follows:
Cash
$ 25,000
Accounts payable
$ 45,000
Accounts receivable
110,000
Capital stock
300,000
Inventory
54,000
Retained earnings
94,000
Building and equipment (net)
250,000
Actual sales for June and budgeted sales for July, August, and September are given below:
June
$137,500
July
360,000
August
400,000
September
320,000
Sales are 20 percent for cash and 80 percent on credit. All credit sales are collected in the month following the sale. There are no bad debts.
The gross margin percentage is 40 percent of sales. The desired ending inventory is equal to 25 percent of the following month’s sales. One fourth of
the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month.
The monthly cash operating expenses are $43,000, and the monthly depreciation expenses are $7,000.
Refer to Figure 8-7. What is the balance of the inventory account at the end of July?
115. Figure 8-7
Macheski Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master
budget. Data for the July master budget are given below:
The June 30th balance sheet follows:
Cash
$ 25,000
Accounts payable
$ 45,000
Accounts receivable
110,000
Capital stock
300,000
Inventory
54,000
Retained earnings
94,000
Building and equipment (net)
250,000
Actual sales for June and budgeted sales for July, August, and September are given below:
June
$137,500
July
360,000
August
400,000
September
320,000
Sales are 20 percent for cash and 80 percent on credit. All credit sales are collected in the month following the sale. There are no bad debts.
The gross margin percentage is 40 percent of sales. The desired ending inventory is equal to 25 percent of the following month’s sales. One fourth of
the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month.
The monthly cash operating expenses are $43,000, and the monthly depreciation expenses are $7,000.
Refer to Figure 8-7. What is the balance of the building and equipment (net) account at the end of July?
116. Figure 8-7
Macheski Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master
budget. Data for the July master budget are given below:
The June 30th balance sheet follows:
Cash
$ 25,000
Accounts payable
$ 45,000
Accounts receivable
110,000
Capital stock
300,000
Inventory
54,000
Retained earnings
94,000
Building and equipment (net)
250,000
Actual sales for June and budgeted sales for July, August, and September are given below:
June
$137,500
July
360,000
August
400,000
September
320,000
Sales are 20 percent for cash and 80 percent on credit. All credit sales are collected in the month following the sale. There are no bad debts.
The gross margin percentage is 40 percent of sales. The desired ending inventory is equal to 25 percent of the following month’s sales. One fourth of
the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month.
The monthly cash operating expenses are $43,000, and the monthly depreciation expenses are $7,000.
Refer to Figure 8-7. What is the balance of the retained earnings account at the end of July?
117. Figure 8-7
Macheski Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master
budget. Data for the July master budget are given below:
The June 30th balance sheet follows:
Cash
$ 25,000
Accounts payable
$ 45,000
Accounts receivable
110,000
Capital stock
300,000
Inventory
54,000
Retained earnings
94,000
Building and equipment (net)
250,000
Actual sales for June and budgeted sales for July, August, and September are given below:
June
$137,500
July
360,000
August
400,000
September
320,000
Sales are 20 percent for cash and 80 percent on credit. All credit sales are collected in the month following the sale. There are no bad debts.
The gross margin percentage is 40 percent of sales. The desired ending inventory is equal to 25 percent of the following month’s sales. One fourth of
the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month.
The monthly cash operating expenses are $43,000, and the monthly depreciation expenses are $7,000.
Refer to Figure 8-7. What is the balance of the cash account at the end of July?
118. Refer to Figure 8-7. What are the total assets at the end of July?
119. A budget that is developed around one particular level of activity is
120. When budgets are used for control,
121. Figure 8-8
Rammazzotti, Inc., is looking for feedback on company performance. The company compares the budget for the
year with the actual costs. Data have been collected below:
Rammazzotti Inc., had the following budgeted data:
Unit sales for 2014
26,000
Unit production for 2014
26,000
Budgeted fixed overhead for 2014:
Supervision
$ 800
Depreciation
2,000
Rent
100
Budgeted variable costs per unit:
Direct materials
$0.15
Direct labor
0.20
Supplies
0.02
Indirect labor
0.05
Power
0.02
The following actually occurred:
Actual unit sales for 2014
24,000
Actual unit production for 2014
28,000
Actual fixed overhead for 2014:
Supervision
$ 850
Depreciation
2,000
Rent
100
Actual variable costs:
Direct materials
$3,500
Direct labor
4,900
Supplies
530
Indirect labor
1,250
Power
470
Refer to Figure 8-8. The total budgeted costs for 2014 were
122. Figure 8-8
Rammazzotti, Inc., is looking for feedback on company performance. The company compares the budget for the
year with the actual costs. Data have been collected below:
Rammazzotti Inc., had the following budgeted data:
Unit sales for 2014
26,000
Unit production for 2014
26,000
Budgeted fixed overhead for 2014:
Supervision
$ 800
Depreciation
2,000
Rent
100
Budgeted variable costs per unit:
Direct materials
$0.15
Direct labor
0.20
Supplies
0.02
Indirect labor
0.05
Power
0.02
The following actually occurred:
Actual unit sales for 2014
24,000
Actual unit production for 2014
28,000
Actual fixed overhead for 2014:
Supervision
$ 850
Depreciation
2,000
Rent
100
Actual variable costs:
Direct materials
$3,500
Direct labor
4,900
Supplies
530
Indirect labor
1,250
Power
470
Refer to Figure 8-8. The budgeted cost for direct labor for 2014 was
123. Figure 8-8
Rammazzotti, Inc., is looking for feedback on company performance. The company compares the budget for the
year with the actual costs. Data have been collected below:
Rammazzotti Inc., had the following budgeted data:
Unit sales for 2014
26,000
Unit production for 2014
26,000
Budgeted fixed overhead for 2014:
Supervision
$ 800
Depreciation
2,000
Rent
100
Budgeted variable costs per unit:
Direct materials
$0.15
Direct labor
0.20
Supplies
0.02
Indirect labor
0.05
Power
0.02
The following actually occurred:
Actual unit sales for 2014
24,000
Actual unit production for 2014
28,000
Actual fixed overhead for 2014:
Supervision
$ 850
Depreciation
2,000
Rent
100
Actual variable costs:
Direct materials
$3,500
Direct labor
4,900
Supplies
530
Indirect labor
1,250
Power
470
Refer to Figure 8-8. The static budget variance for rent is
124. Figure 8-8
Rammazzotti, Inc., is looking for feedback on company performance. The company compares the budget for the
year with the actual costs. Data have been collected below:
Rammazzotti Inc., had the following budgeted data:
Unit sales for 2014
26,000
Unit production for 2014
26,000
Budgeted fixed overhead for 2014:
Supervision
$ 800
Depreciation
2,000
Rent
100
Budgeted variable costs per unit:
Direct materials
$0.15
Direct labor
0.20
Supplies
0.02
Indirect labor
0.05
Power
0.02
The following actually occurred:
Actual unit sales for 2014
24,000
Actual unit production for 2014
28,000
Actual fixed overhead for 2014:
Supervision
$ 850
Depreciation
2,000
Rent
100
Actual variable costs:
Direct materials
$3,500
Direct labor
4,900
Supplies
530
Indirect labor
1,250
Power
470
Refer to Figure 8-8. The actual cost for direct materials for 2014 was
125. Figure 8-8
Rammazzotti, Inc., is looking for feedback on company performance. The company compares the budget for the
year with the actual costs. Data have been collected below:
Rammazzotti Inc., had the following budgeted data:
Unit sales for 2014
26,000
Unit production for 2014
26,000
Budgeted fixed overhead for 2014:
Supervision
$ 800
Depreciation
2,000
Rent
100
Budgeted variable costs per unit:
Direct materials
$0.15
Direct labor
0.20
Supplies
0.02
Indirect labor
0.05
Power
0.02
The following actually occurred:
Actual unit sales for 2014
24,000
Actual unit production for 2014
28,000
Actual fixed overhead for 2014:
Supervision
$ 850
Depreciation
2,000
Rent
100
Actual variable costs:
Direct materials
$3,500
Direct labor
4,900
Supplies
530
Indirect labor
1,250
Power
470
Refer to Figure 8-8. The static budget variance for total fixed overhead is
126. Figure 8-8
Rammazzotti, Inc., is looking for feedback on company performance. The company compares the budget for the
year with the actual costs. Data have been collected below:
Rammazzotti Inc., had the following budgeted data:
Unit sales for 2014
26,000
Unit production for 2014
26,000
Budgeted fixed overhead for 2014:
Supervision
$ 800
Depreciation
2,000
Rent
100
Budgeted variable costs per unit:
Direct materials
$0.15
Direct labor
0.20
Supplies
0.02
Indirect labor
0.05
Power
0.02
The following actually occurred:
Actual unit sales for 2014
24,000
Actual unit production for 2014
28,000
Actual fixed overhead for 2014:
Supervision
$ 850
Depreciation
2,000
Rent
100
Actual variable costs:
Direct materials
$3,500
Direct labor
4,900
Supplies
530
Indirect labor
1,250
Power
470
Refer to Figure 8-8. The static budget variance for direct materials is
127. Figure 8-8
Rammazzotti, Inc., is looking for feedback on company performance. The company compares the budget for the
year with the actual costs. Data have been collected below:
Rammazzotti Inc., had the following budgeted data:
Unit sales for 2014
26,000
Unit production for 2014
26,000
Budgeted fixed overhead for 2014:
Supervision
$ 800
Depreciation
2,000
Rent
100
Budgeted variable costs per unit:
Direct materials
$0.15
Direct labor
0.20
Supplies
0.02
Indirect labor
0.05
Power
0.02
The following actually occurred:
Actual unit sales for 2014
24,000
Actual unit production for 2014
28,000
Actual fixed overhead for 2014:
Supervision
$ 850
Depreciation
2,000
Rent
100
Actual variable costs:
Direct materials
$3,500
Direct labor
4,900
Supplies
530
Indirect labor
1,250
Power
470
Refer to Figure 8-8. The static budget variance for total variable costs is
128. Figure 8-8
Rammazzotti, Inc., is looking for feedback on company performance. The company compares the budget for the
year with the actual costs. Data have been collected below:
Rammazzotti Inc., had the following budgeted data:
Unit sales for 2014
26,000
Unit production for 2014
26,000
Budgeted fixed overhead for 2014:
Supervision
$ 800
Depreciation
2,000
Rent
100
Budgeted variable costs per unit:
Direct materials
$0.15
Direct labor
0.20
Supplies
0.02
Indirect labor
0.05
Power
0.02
The following actually occurred:
Actual unit sales for 2014
24,000
Actual unit production for 2014
28,000
Actual fixed overhead for 2014:
Supervision
$ 850
Depreciation
2,000
Rent
100
Actual variable costs:
Direct materials
$3,500
Direct labor
4,900
Supplies
530
Indirect labor
1,250
Power
470
Refer to Figure 8-8. The total flexible budgeted costs for 2014 are