2. State whether the following sentences are TRUE or FALSEASTARINS#Statements1The production budget is typically prepared prior to the salesbudget.One benefit of budgeting is that it coordinates the activities ofthe entire organization.The master budget is a network consisting of many separatebudgets that are interdependent.Sales forecasts are drawn up after the cash budget has beencompleted because only then are the funds available formarketing known.5A sales budget is a detailed schedule showing the expected salesfor the budget period; typically, it is expressed in both dollarsand units of product.234TRUE or FALSE3. Which of the following represents the normal sequence in which the indicated budgets areprepared?A. Direct Materials, Cash, SalesB. Production, Cash, Income StatementC. Sales, Balance Sheet, Direct LaborD. Production, Manufacturing Overhead, Sales 12804. Which of the following represents the correct order in which the indicated budget documents for amanufacturing company would be prepared?A. Sales budget, cash budget, direct materials budget, direct labor budgetB. Production budget, sales budget, direct materials budget, direct labor budgetC. Sales budget, cash budget, production budget, direct materials budgetD. Selling and administrative expense budget, cash budget, budgeted income statement, budgetedbalance sheet5. Which of the following statements is not correct?A. The sales budget is the starting point in preparing the master budget.B. The sales budget is constructed by multiplying the expected sales in units by the sales price.C. The sales budget generally is accompanied by a computation of expected cash receipts for theforthcoming budget period.D. The cash budget must be prepared prior to the sales budget because managers want to knowthe expected cash collections on sales made to customers in prior periods before projectingsales for the current period.6. Shown below is the sales forecast for Cooper Inc. for the first four months of the coming year.Jan$15,000$100,000Cash sales.......FebMar$24,000 $18,000$120,000 $90,000Apr$14,000$70,000Credit sales.....On average, 50% of credit sales are paid for in the month of the sale, 30% in the month following

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2. State whether the following sentences are TRUE or FALSE # Statements 1 2 One benefit of budgeting is that it coordinates the activities of the entire organization. The master budget is a network consisting of many separate budgets that are interdependent. Sales forecasts are drawn up after the cash budget has been completed because only then are the funds available for marketing known. 5 A sales budget is a detailed schedule showing the expected sales for the budget period; typically, it is expressed in both dollars and units of product. The production budget is typically prepared prior to the sales budget. 3 TRUE or FALSE

2. State whether the following sentences are TRUE or FALSE # Statements 1 2 One benefit of budgeting is that it coordinates the activities of the entire organization. The master budget is a network consisting of many separate budgets that are interdependent. Sales forecasts are drawn up after the cash budget has been completed because only then are the funds available for marketing known. 5 A sales budget is a detailed schedule showing the expected sales for the budget period; typically, it is expressed in both dollars and units of product. The production budget is typically prepared prior to the sales budget. 3 TRUE or FALSE

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

2. State whether the following sentences are TRUE or FALSE
ASTARINS
#
Statements
1
The production budget is typically prepared prior to the sales
budget.
One benefit of budgeting is that it coordinates the activities of
the entire organization.
The master budget is a network consisting of many separate
budgets that are interdependent.
Sales forecasts are drawn up after the cash budget has been
completed because only then are the funds available for
marketing known.
5
A sales budget is a detailed schedule showing the expected sales
for the budget period; typically, it is expressed in both dollars
and units of product.
2
3
4
TRUE or FALSE
3. Which of the following represents the normal sequence in which the indicated budgets are
prepared?
A. Direct Materials, Cash, Sales
B. Production, Cash, Income Statement
C. Sales, Balance Sheet, Direct Labor
D. Production, Manufacturing Overhead, Sales 1280
4. Which of the following represents the correct order in which the indicated budget documents for a
manufacturing company would be prepared?
A. Sales budget, cash budget, direct materials budget, direct labor budget
B. Production budget, sales budget, direct materials budget, direct labor budget
C. Sales budget, cash budget, production budget, direct materials budget
D. Selling and administrative expense budget, cash budget, budgeted income statement, budgeted
balance sheet
5. Which of the following statements is not correct?
A. The sales budget is the starting point in preparing the master budget.
B. The sales budget is constructed by multiplying the expected sales in units by the sales price.
C. The sales budget generally is accompanied by a computation of expected cash receipts for the
forthcoming budget period.
D. The cash budget must be prepared prior to the sales budget because managers want to know
the expected cash collections on sales made to customers in prior periods before projecting
sales for the current period.
6. Shown below is the sales forecast for Cooper Inc. for the first four months of the coming year.
Jan
$15,000
$100,000
Cash sales.......
Feb
Mar
$24,000 $18,000
$120,000 $90,000
Apr
$14,000
$70,000
Credit sales.....
On average, 50% of credit sales are paid for in the month of the sale, 30% in the month following

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Please fill in the blanks using the options shown.
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