Title: Question 1
QA_Ori:
A budget helps managers control and monitor a business by 1) communicating plans to
Title: Question 2
QA_Ori:
Two common benchmarks used by managers to evaluate performance are: past
Title: Question 3
QA_Ori:
Continuous budgeting provides managers a full set of updated budgets each time a
Title: Question 4
QA_Ori:
Title: Question 5
QA_Ori:
Budgeting can be a strong positive motivating force if employees are involved or
Title: Question 6
QA_Ori:
Title: Question 7
QA_Ori:
The sales budget reflects the expected sales to be made over a period of time, stated in
Title: Question 8
QA_Ori:
period.
Title: Question 9
QA_Ori:
good
Title: Question 10
QA_Ori:
A cash budget shows the planned cash receipts and cash disbursements for each
Title: Question 11
QA_Ori:
Title: Question 12
QA_Ori:
Title: Question 13
QA_Ori:
decision-making should incorporate information and expectations provided by the
operating managers of distribution centers.
Title: Question 14
QA_Ori:
Budget Participant Description
Sales manager Information on estimated sales (units and dollars).
Production manager Number of units to produce based on estimated sales.
Title: Quick Study 22-1
QA_Ori:
Correct answer is 4.
Title: Quick Study 22-2
QA_Ori:
Three useful guidelines to help motivate employees with budgeting are
1. Employees affected by a budget should be consulted when it is prepared.
Title: Quick Study 22-3
QA_Ori:
Montel Company
Computation of Budgeted Cost of Purchases
For Month Ended July 31
Budgeted ending inventory $ 40,000
Montel Company
Computation of Budgeted Cost of Purchases
For Month Ended July 31
Budgeted ending inventory $40,000
Title: Quick Study 22-4
QA_Ori:
1. The bottom-up approach to budgeting is considered more successful because
2. Examples of bottom-up budgeting include
Title: Quick Study 22-5
QA_Ori:
Computation of budgeted Accounts Receivable balance as of July 31
Sales month Total Sales
Credit Sales* Percent Still
Uncollected*
Amount
Uncollected
* Credit sales are 40% of total sales—of these credit sales, 20% are collected in
the sale month, 70% are collected in the month after sale, and 10% are collected in the
second month after sale.
Title: Quick Study 22-6
QA_Ori:
Gado Merchandising Company
Cash Budget
For Month Ended March 31
Beginning cash balance $ 72,000
Cash receipts from sales 300,000
Title: Quick Study 22-7
QA_Ori:
1. Activity-based budgeting requires managers to focus on the activities of their
2. Traditional budgeting consists of listing the amount of resources required for
Title: Quick Study 22-8
QA_Ori:
Forrest Company
Production Budget
For Month Ended November 30
Next month’s budgeted sales 350,000
Ratio of inventory to future sales x 10%
Title: Quick Study 22-9
QA_Ori:
Forrest Company
Factory Overhead Budget
For Month Ended November 30
Units to be produced (from QS 22-8) 395,000
Title: Quick Study 22-10
QA_Ori:
Grace
Sales Budget
For Month Ended June 30
Prior month’s unit sales 1,000
Title: Quick Study 22-11
QA_Ori:
Grace
Selling Expense Budget
For Month Ended June 30
Budgeted sales (from QS 22-10) $260,000
Title: Quick Study 22-12
QA_Ori:
Grace
Budgeted Cash Receipts
For Month Ended June 30
Budgeted sales (from QS 22-10) $260,000
Title: Quick Study 22-13
QA_Ori:
Sales………………………………………………………….. BIS
Office salaries paid…………………………………….. BIS
Title: Quick Study 22-14
QA_Ori:
CANDLE SHOPPE
Cash Receipts Budget
For Month Ended September 30
Cash receipts from September cash sales (40% x $170,000) $ 68,000
Title: Quick Study 22-15
QA_Ori:
WELLS COMPANY
Budgeted Cash Receipts
For Month Ended November 30
Cash receipts from November cash sales (20% x $80,000) $ 16,000
Title: Quick Study 22-16
QA_Ori:
GORDANDS
Cash Disbursements for Merchandise (Budgeted)
For Month Ended September 30
Title: Quick Study 22-17
QA_Ori:
MEYER CO.
Cash Disbursements for Merchandise (Budgeted)
For January, February, and March
January February March
Purchases $15,800 $18,600 $20,200
Cash disbursements for
* Accounts payable balance at December 31
Title: Quick Study 22-18
QA_Ori:
RAIDER-X CORP.
Purchases Budget (in units)
For Month Ended April 30
Budgeted ending inventory (130% x 3,000) 3,900
(3,000)
Units to be purchased 18,900
Title: Quick Study 22-19
QA_Ori:
LEXI COMPANY
Merchandise Purchases Budget
For April, May, and June
April May June
Next month’s budgeted sales (units) 1,220,000 980,000 1,020,000
Ratio of inventory to future sales x 30% x 30% x 30%
Title: Quick Study 22-20
QA_Ori:
CHAMP, INC.
Production Budget
For Month Ended May 31
Next month’s budgeted sales (units) 200
Ratio of inventory to future sales x 60%
Title: Quick Study 22-21
QA_Ori:
ZORTEK CORP.
Direct Materials Budget
For Month Ended January 31
Budget production (units) 400
*February’s budgeted production.
Title: Quick Study 22-22
QA_Ori:
TORA CO.
Direct Labor Budget
For Month Ended July 31
Budget production (units) 1,020
Title: Quick Study 22-23
QA_Ori:
SCORA INC.
Sales Budget
For January, February, and March
Budgeted
Unit Sales
Budgeted
Unit Price
Budgeted
Total Sales
January 1,200 $50 $ 60,000
Title: Quick Study 22-24
QA_Ori:
SCORA INC.
Cash Receipts Budget
For January, February, and March
January February March
Sales (from QS 22-23) $60,000 $100,000 $80,000
