Which of the following budgets is the preferred starting point when developing

Which of the following budgets is the preferred

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15. Which of the following budgets is the preferred starting point when developing a master budget? A.Production BudgetB.COGS BudgetC.Budgeted Income StatementD. Sales BudgetE.Cash Budget 16. Colorado Company manufactures tents. They anticipate tent sales of 100,000 units, 96,000 units, and102,000 units in April, May, and June, respectively. Company policy is to maintain an ending finishedgoods inventory equal to 40% of the following month’s sales. Company policy also requires an endingraw material inventory equal to 20% of the following month’s Raw Material needs. On the basis ofthis information, how many tents would the company plan to produce in May? April ending FGI: 40% x 96k units = 38,400 units May ending FGI: 40% x 102k units = 40,800 units May production = 96,000 units sold + 40,800 EI – 38,400 BI = 98,400 units
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7 17. Smith Corporation, an electronics company, is trying to forecast cash flow for April 2014. Thecompany has a policy to maintain a minimum cash balance of $40,000 at the end of each month. Theycurrently are forecasting a March 2014 month‐end cash balance of $50,000. Budgeted items for April2014 include the following (where appropriate the expense or purchase will be paid in cash in April):Cash Receipts$320,000Direct Material Purchases$215,000Selling & Admin$80,000Cash Dividend$5,000Depreciation$40,000How much cash does Smith need to borrow at the end of April to end the month with its minimumcash balance? 18. Tres Equis, a local Austin beverage company, has provided you the following historical sales collectiondata:Percent of sales collected in the month of sale:80%Percent of sales collected in the first month following sale:10%Percent of sales collected in the second month following sale:5%Percent of sales collected in the third month following sale:2.5%Uncollected sales remaining:written offMonthlysales for the first half of the year are:January$169,000February$270,000March$410,000April$370,000May$290,000June$307,000 Assuming all sales are made on account, the estimated total cash collections for May are: April cash disbursements: $215k + $80k + $5k = $300k April cash balance: $50k beg. + $320k receipts - $300k disb. = $70k Since $70k > $40k minimum cash balance, $0 borrowing needed. % COLL MAY SALES IN MAY $ COLL Jan $169,000 0.0% $0 Feb $270,000 2.5% $6,750 Mar $410,000 5.0% $20,500 Apr $370,000 10.0% $37,000 May $290,000 80.0% $232,000 TOTAL $296,250 ANSWER is E. None of the Above.
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ACC 312 Fundamentals of Managerial Accounting Midterm Exam #2, Spring 2013 8
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