91) Toward the end of the fiscal year, the owner of a small company came back from lunch concerned because he had learned that a business targeted to the same customers as his was planning on spending $150,000 on promotion. As soon as he arrived at the office, he called his financial manager and said, "I want to budget $150,000 for next year's promotion." Which method of promotional budgeting đid the owner want to use? A) the objective-task method B) the percentage-of-sales method C) the competitive-parity method D) the bottom-up method E) the pull-push method

91) Toward the end of the fiscal year, the owner of a small company came back from lunch concerned because he had learned that a business targeted to the same customers as his was planning on spending $150,000 on promotion. As soon as he arrived at the office, he called his financial manager and said, "I want to budget $150,000 for next year's promotion." Which method of promotional budgeting đid the owner want to use? A) the objective-task method B) the percentage-of-sales method C) the competitive-parity method D) the bottom-up method E) the pull-push method

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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____ 46. The budget process involves doing all the following except: a. establishing specific goals b. executing plans to achieve the goals c. periodically comparing actual results with the goals d. dismissing all managers who fail to achieve operational goals specified in the budget ____ 47. Division W of MJW Company has sales of $140,000, cost of goods sold of $83,000, operating expenses of $43,000, and invested assets of $100,000. What is the profit margin for Division W? a. 14% b. 2.8% c. 10% d. 5.47% ____ 48. Bulls Company is considering the acquisition of a machine that costs $375,000. The machine is expected to have a useful life of 6 years, a negligible residual value, an annual cash flow of $150,000, and annual operating income of $87,500. What is the estimated cash payback period for the machine? a. 3 years b. 4.3 years c. 2.5 years d. 5 years ____ 49. The…
You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare a master budget for the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the information assembled below. The company sells many styles of earrings, but all are sold for the same price—$17 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings): January (actual) 22,600 June (budget) 52,600 February (actual) 28,600 July (budget) 32,600 March (actual) 42,600 August (budget) 30,600 April (budget) 67,600 September (budget) 27,600 May (budget) 102,600 The concentration…
The controller of Ultramint Company wishes to improve the company's control system by preparing a monthly cash budget. The following information relates to the month ending July 31, 2008. June 30, 2008 cash balance ... Dividends to be declared on July 15* Cash expenditures to be paid in July for operating expenses Amortization expense.... Cash collections to be received ... $ 90,000 24,000 73,600 9,000 178,000 112,400 41,000 50,000 Merchandise purchases to be paid in cash Equipment to be purchased for cash. …….. Ulramint Company wishes to maintain a minimum cash balance of .... *Dividends are payable to shareholders of record on declaration date, 30 days after declaration. Required: Prepare a cash budget for the month ended July 31, 2008, indicating how much, if anything, Ultramint will need to borrow to meet its minimum cash requirement.
Help solve this Gemilang Bumi Bhd. It is in the early stages of planning for next year's annual budget. Alex recently joined the company as a business accountant and is interested in learning as much about the budgeting process of the organisation as possible. Alex introduced the following discussion after the latest meeting with the Sales Manager, who is Rock and Raju as Production Manager. Alex: Since I am new around here and I am going to be involved with the preparation of the annual budget. I’d be interested to learn how the two of you estimate sales and production numbers. Rock: We start out very methodically by looking at recent history, discussing what we know about current accounts, potential customers, and the general state of consumer spending. Then we add the usual dose of intuition to come up with the best forecast we can. Raju: I usually take the sales projections as a basis for my projections. Of course we have to make estimate of what this year’s ending inventories will…
Upon receipt of the budget, the team manager, Damion Brownie, has now informed you that, in keeping with industry players, the management of Varsity Supplies & Things have indicated an industry requirement to maintain a minimum cash balance of $162,000 each month. He has also noted that management is very keen on keeping the gearing ratio of the business as low as possible and would therefore prefer to cushion any gaps internally using equity financing.Based on the budget prepared, will the business be achieving this desired target? Suggest three (3) internal strategies that may be employed by management to improve the organization’s monthly cash flow and militate against or reduce any possible shortfall reflected in the budget prepared. Each strategy must be fully explained.
You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare a master budget for the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the information assembled below. The company sells many styles of earrings, but all are sold for the same price—$13 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings): January (actual) 21,400 June (budget) 51,400 February (actual) 27,400 July (budget) 31,400 March (actual) 41,400 August (budget) 29,400 April (budget) 66,400 September (budget) 26,400 May (budget) 101,400 The concentration…
The management of Mecca Copy, a photocopying center located on University Avenue, has compiled the following data to use in preparing its budgeted balance sheet for next year: Ending Balances Cash ? Accounts receivable $ 10,100 Supplies inventory $ 4,600 Equipment $ 44,000 Accumulated depreciation $ 17,800 Accounts payable $ 3,800 Common stock $ 5,000 Retained earnings ? The beginning balance of retained earnings was $37,000, net income is budgeted to be $21,700, and dividends are budgeted to be $4,300. Prepare the company’s budgeted balance sheet. (Amounts to be deducted should be indicated by a minus sign.)