Exam 3, Fall 06 - Exam 3 Fall 06 Multiple Choice Identify...

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Exam 3, Fall 06 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. A moving twelve-month budget where a future month is added as the current month expires is called a(n) a. zero-base budget b. incremental budget c. revolving budget d. continuous budget ____ 2. The budget that is a comprehensive financial plan for the organization as a whole is called a a. capital budget b. master budget c. comprehensive budget d. continuous budget ____ 3. The first step in the budgeting process is the preparation of the a. production budget b. selling and administrative expenses budget c. sales forecast d. cash budget ____ 4. Depreciation on the production equipment would appear in which of the following budgets? a. cash budget b. production budget c. selling and administrative expenses budget d. manufacturing overhead budget ____ 5. Of the budgets listed below, which is usually prepared last? a. production budget b. cash budget c. sales budget d. overhead budget ____ 6. Jiggy Company plans to sell 33,000 units during the month of May. Beginning in- ventory was 1,200 units. The company plans to have 2,500 units on hand at the end of the month. Each unit requires 3 pounds of raw materials. If raw materi- al inventory on May 1 is 4,400 pounds and desired ending inventory is 2,200 pounds, how many pounds of raw materials must be purchased during May? a. 103,500 b. 102,900 c. 105,100 d. 100,700 Figure 8-1 Projected sales for Sommers, Inc., for next year and beginning and ending in- ventory data are as follows: Sales 50,000 units Beginning inventory 4,000 units
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Desired ending inventory 8,000 units The selling price is $40 per unit. Each unit requires four pounds of material which costs $6 per pound. The beginning inventory of raw materials is 12,000 pounds. The company wants to have 3,000 pounds of material in inventory at the end of the year. ____ 7. Refer to Figure 8-1. Sommers' budgeted sales would be a. $2,160,000 b. $2,320,000 c. $2,480,000 d. $2,000,000 ____ 8. Refer to Figure 8-1. How many pounds of material would Sommers need to purchase? a. 216,000 b. 225,000 c. 207,000 d. 201,000 ____ 9. Bronco Company sells a product for $10. Budgeted sales for the first quarter of the current year are as follows: Budgeted Sales January $600,000 February 800,000 March 900,000 The company wants to maintain an inventory of finished units equal to 30 percent of the following month's sales, and 10,000 units are on hand at the beginning of the year. Each unit requires two pounds of raw material costing $1 per pound.
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Exam 3, Fall 06 - Exam 3 Fall 06 Multiple Choice Identify...

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