I. A tight budget may create ______. Why? a. budgetary slack b. discouragement c. a flexible budget d. a "spend it or lose it" mentality. 2. The first step of the budget process is ______. Why? a. plan b. direct c. control d. feedback 3. Static budgets are often by ______. Why? a. production departments b. administrative departments c. responsibility centers d. capital projects 4. The total estimated sales for the coming year is 250,000 units. the estimated inventory at the beginning of the year is 22,500 units, and the desired inventory at the end of the year is 30,000 units. The total production indicated in the production budget is _____. Show your solution. 5. Dix Company expects $650,000 of credit sales in March and $800,000 of credit sales in April. Dix historically collects 70% of its sales in the month of sales and 30% in the following month. How much cash does Dix expect to collect in April? Show your solution. ----------------------------------------------------------------------- II. Borling Inc. bases its selling and administrative expense budget on the number of units sold. The variable selling and administrative expense is $8.30 per unit. The budgeted fixed selling and administrative expense is $93,870 per month, which includes depreciation of $16,380. The remainder of the fixed selling and administrative expense represents current cash flows. The sales budget shows 6,300 units are planned to be sold in July. Required: Prepare the selling and administrative expense budget for July. III. The manufacturing overhead budget of Inch Corporation is based on budgeted direct labor-hours. The September direct labor budget indicates that 4,400 direct labor-hours will be required in that month. The variable overhead rate is $5.00 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $59,400 per month, which includes depreciation of $10,560. All other fixed manufacturing overhead costs represent current cash flows. Required: a. Determine the cash disbursement for manufacturing overhead for September. b. Determine the predetermined overhead rate for September.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
I.
- A tight budget may create ______. Why?
a. budgetary slack
b. discouragement
c. a flexible budget
d. a "spend it or lose it" mentality.
2. The first step of the budget process is ______. Why?
a. plan
b. direct
c. control
d. feedback
3. Static budgets are often by ______. Why?
a. production departments
b. administrative departments
c. responsibility centers
d. capital projects
4. The total estimated sales for the coming year is 250,000 units. the estimated inventory at the beginning of the year is 22,500 units, and the desired inventory at the end of the year is 30,000 units. The total production indicated in the production budget is _____. Show your solution.
5. Dix Company expects $650,000 of credit sales in March and $800,000 of credit sales in April. Dix historically collects 70% of its sales in the month of sales and 30% in the following month. How much cash does Dix expect to collect in April? Show your solution.
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II.
Borling Inc. bases its selling and administrative expense budget on the number of units sold. The variable selling and administrative expense is $8.30 per unit. The budgeted fixed selling and administrative expense is $93,870 per month, which includes
Required:
Prepare the selling and administrative expense budget for July.
III.
The manufacturing
Required:
a. Determine the cash disbursement for manufacturing overhead for September.
b. Determine the predetermined overhead rate for September.
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