Chapter 6, Problem 6.32P

1.

To determine

Master Budget:

The master budget is the core budget that describes the full process of the budget. This budget shows all the operating and financial plans of the company for an accounting period and this budget includes all the budgeted financial statements.

Production Budget:

The production budget refers to that budget which forecasts the production for the future accounting period. The budgeted production for any financial period is planned by combining the forecasted unit of sales and the finished goods inventory and deducting the beginning goods inventory.

Revenue Budget:

The revenue budget is the budget prepared to estimate the revenue, the expected number of units to be produced and the expected selling price for each product. The revenue budget is the first step for an operating budget and the basis for the production and cost of goods sold budget.

Direct Labor Budget:

The direct labor budget provides information about the total direct manufacturing labor hours and the cost of the total direct manufacturing labor hour.

To prepare: The revenue budget.

2.

To determine

To explain: The questions the CEO can ask the marketing manager while reviewing the revenue budget.

3.

To determine

To prepare: The production budget.

4.

To determine

To prepare: The direct materials purchases budget in quantities.

5.

To determine

The direct materials purchases budget in dollars.

6.

To determine

To prepare: The direct manufacturing labor costs budget.

7.

To determine

To prepare: The ending inventories for finished goods inventory.

8.

To determine

To explain: The questions a CEO can ask the production manager while reviewing the production, direct materials and manufacturing labor budgets.

9.

To determine

To explain: The help a budget can make when the top management is better managing the company.