1.Toscano Company makes all its sales on account. Accounts receivable payment experience is as follows:
|
Percent paid in the month of sale
|
25%
|
|
Percent paid in the month after the sale
|
64%
|
|
Percent paid in the second month after the sale
|
5%
|
Toscano provided information on sales as follows:
|
May
|
$140,000
|
|
June
|
$115,000
|
|
July
|
$126,000
|
|
August (expected)
|
$132,000
|
How much of May's sales are expected to be uncollectible?
A)$8,400
B)$7,200
C)$2,500
D)$0
E)$5,000
2.Cash budgeting is important to which of the following?
A)manufacturing firms
B)retail stores
C)all of these
D)not-for-profit agencies
E)local government agencies
3.Which of the following is not an advantage of participative budgeting?
A)It fosters a sense of managerial responsibility.
B)It encourages the introduction of budgetary slack.
C)It encourages a higher level of performance.
D)It fosters a sense of creativity in managers.
E)It encourages greater goal congruence.
4.Which of the following statements is true?
A)The cost of goods sold budget is prepared before the direct labor and overhead budgets.
B)The cash budget is prepared before the direct materials purchases budget.
C)The production budget is the first budget to be prepared in the master budget.
D)Service firms need not prepare a master budget.
E)The budgeted balance sheet is prepared after the cash budget.
5.Bright Lamp Company manufactures lamps. The estimated number of lamp sales for the last three months of 2011 are as follows:
|
Month
|
Sales
|
|
October
|
10,000
|
|
November
|
14,000
|
|
December
|
13,000
|
Finished goods inventory at the end of September was 3,000 units. Ending finished goods inventory is budgeted to equal 25 percent of the next month's sales. Bright Lamp expects to sell the lamps for $25 each. January 2012 sales are projected at 16,000 lamps. How many lamps should be produced in November?
A)13,750 lamps
B)14,000 lamps
C)11,000 lamps
D)10,500 lamps