Question 1

Which of the following budgets is not directly associated with the production budget?

Accepted Answer

The capital expenditures budget is not directly associated with the production budget as it pertains to long-term investments in assets such as property, equipment, and technology. The direct materials purchases budget, direct labor cost budget, and factory overhead cost budget are all directly related to the production budget, which outlines the quantity of goods to be produced and associated costs.

Question 2

The production budgets are used to prepare which of the following budgets.

Accepted Answer

The production budget is used to calculate the quantity of goods to be produced during a period. This requires estimation of direct materials purchases, direct labor cost, and factory overhead cost which will be used to produce the goods. Therefore, option B is the correct answer. Operating expenses, sales in dollars and sales in units are not related to the production budget.

Question 3

Based on the following production and sales estimates for May, determine the number of units expected to be manufactured in May.

Accepted Answer

The answer of Based on the following production and sales...

Question 4

Production and sales estimates for March for the Robin Co. are as follows:  The number of units expected to be manufactured in March is:

Accepted Answer

The number of units expected to be manufactured in March is the total of the production and sales estimates, which is 11,000 + 16,300 = 27,300. Therefore, the best choice is C.

Question 5

Production and sales estimates for May for the Robin Co. are as follows:  The number of units expected to be sold in May is:

Accepted Answer

The answer of Production and sales estimates for May for...

Question 6

Below is budgeted production and sales information for Flushing Company for the month of December:  The unit selling price for product XXX is $5 and for product ZZZ is $15.
Budgeted production for product ZZZ during the month is:

Accepted Answer

The answer of Below is budgeted production and sales information...

Question 7

Production estimates for August are as follows:  For each unit produced, the direct materials requirements are as follows:
 The total direct materials purchases (assuming no beginning or ending inventory of material) of materials A and B required for August production is:

Accepted Answer

The answer of Production estimates for August are as follows:...

Question 8

If the expected sales volume for the current period is 8,000 units, the desired ending inventory is 1,400 units, and the beginning inventory is 1,200 units, the number of units set forth in the production budget, representing total production for the current period, is:

Accepted Answer

The formula for total production for the current period is:
Expected sales + Desired ending inventory - Beginning inventory = Total production
Plugging in the numbers:
8,000 + 1,400 - 1,200 = 8,200 units (Option B)

Question 9

Below is budgeted production and sales information for Flushing Company for the month of December:  The unit selling price for product XXX is $5 and for product ZZZ is $15.
Budgeted sales for the month are:

Accepted Answer

The answer of Below is budgeted production and sales information...

Question 10

The first budget customarily prepared as part of an entity's master budget is the:

Accepted Answer

The sales budget is typically the first budget prepared in a master budget as it is used to forecast the expected sales revenue for the period. This information is important for preparing the other budgets in the master budget, such as the production budget and cash budget. The direct materials purchases budget is typically prepared after the production budget, as it relies on the production quantities and requirements.

Question 11

Mandy Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 98,000 units, and desired ending inventory is 80,000 units. The quantities of direct materials expected to be used for each unit of finished product are given below. Material A .50 lb. per unit @ $ .60 per pound
Material B 1.00 lb. per unit @ $1.70 per pound
Material C 1.20 lb. per unit @ $1.00 per pound
The dollar amount of direct material C used in production during the year is:

Accepted Answer

Direct material C used in production = (Budgeted sales + Desired ending inventory - Estimated beginning inventory) * Direct material C per unit * Direct material C cost per pound= (640,000 + 80,000 - 98,000) * 1.20 * 1.00= 522,000 * 1.20 * 1.00= $626,400

Question 12

Production estimates for August are as follows:  For each unit produced, the direct materials requirements are as follows:
 The number of pounds of materials A and B required for August production is:

Accepted Answer

The answer of Production estimates for August are as follows:...

Question 13

Production and sales estimates for June are as follows:  The budgeted total sales for June is:

Accepted Answer

The answer of Production and sales estimates for June are...

Question 14

Principal components of a master budget include which of the following?

Accepted Answer

The principal components of a master budget include the production budget, which outlines how much of each product needs to be produced, the sales budget, which details the company's projected sales and revenue, and the capital expenditures budget, which outlines the company's planned investments in long-term assets. Therefore, all of the above options are correct.

Question 15

Mandy Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 98,000 units, and desired ending inventory is 80,000 units. The quantities of direct materials expected to be used for each unit of finished product are given below. Material A .50 lb. per unit @ $ .60 per pound
Material B 1.00 lb. per unit @ $1.70 per pound
Material C 1.20 lb. per unit @ $1.00 per pound
The dollar amount of direct material B used in production during the year is:

Accepted Answer

The dollar amount of direct material B used in production during the year is $1,057,400. This is calculated by multiplying the number of units to be produced (640,000) by the amount of material B used per unit (1.00 lb.) and then multiplying that result by the cost per pound of material B ($1.70).

Question 16

Below is budgeted production and sales information for Flushing Company for the month of December:  The unit selling price for product XXX is $5 and for product ZZZ is $15.
Budgeted production for product XXX during the month is:

Accepted Answer

The answer of Below is budgeted production and sales information...

Question 17

Production and sales estimates for June are as follows:  The number of units expected to be manufactured in June is:

Accepted Answer

The answer of Production and sales estimates for June are...

Question 18

Motorcycle Manufacturers, Inc. projected sales of 78,000 machines for 2012. The estimated January 1, 2012, inventory is 6,500 units, and the desired December 31, 2012, inventory is 7,000 units. What is the budgeted production (in units) for 2012?

Accepted Answer

The answer of Motorcycle Manufacturers, Inc. projected sales of 78,000...

Question 19

The budget that needs to be completed first when preparing the master budget is the:

Accepted Answer

The sales budget is the budget that needs to be completed first when preparing the master budget because it provides the basis for all other budgets. The production budget, cash budget, and capital expenditures budget all depend on the sales budget as their starting point.

Question 20

Manicotti Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 108,000 units, and desired ending inventory is 90,000 units. The quantities of direct materials expected to be used for each unit of finished product are given below. Material A .50 lb. per unit @ $ .60 per pound
Material B 1.00 lb. per unit @ $1.70 per pound
Material C 1.20 lb. per unit @ $1.00 per pound
The dollar amount of direct material A used in production during the year is:

Accepted Answer

The correct answer is A. The dollar amount of direct material A used in production during the year is $186,600. This is calculated by multiplying the number of units to be produced (640,000) by the amount of material A used per unit (0.50 lb.) and then multiplying the result by the cost per pound of material A ($0.60).

Quiz 22: Budgeting

Which of the following budgets is not directly associated with the production budget?

The production budgets are used to prepare which of the following budgets.

Based on the following production and sales estimates for May, determine the number of units expected to be manufactured in May.

Production and sales estimates for March for the Robin Co. are as follows: The number of units expected to be manufactured in March is:

Production and sales estimates for May for the Robin Co. are as follows: The number of units expected to be sold in May is:

Below is budgeted production and sales information for Flushing Company for the month of December: The unit selling price for product XXX is $5 and for product ZZZ is $15. Budgeted production for product ZZZ during the month is:

Production estimates for August are as follows: For each unit produced, the direct materials requirements are as follows: The total direct materials purchases (assuming no beginning or ending inventory of material) of materials A and B required for August production is:

If the expected sales volume for the current period is 8,000 units, the desired ending inventory is 1,400 units, and the beginning inventory is 1,200 units, the number of units set forth in the production budget, representing total production for the current period, is:

Below is budgeted production and sales information for Flushing Company for the month of December: The unit selling price for product XXX is $5 and for product ZZZ is $15. Budgeted sales for the month are:

The first budget customarily prepared as part of an entity's master budget is the:

Production estimates for August are as follows: For each unit produced, the direct materials requirements are as follows: The number of pounds of materials A and B required for August production is:

Production and sales estimates for June are as follows: The budgeted total sales for June is:

Principal components of a master budget include which of the following?

Below is budgeted production and sales information for Flushing Company for the month of December: The unit selling price for product XXX is $5 and for product ZZZ is $15. Budgeted production for product XXX during the month is:

Production and sales estimates for June are as follows: The number of units expected to be manufactured in June is:

Motorcycle Manufacturers, Inc. projected sales of 78,000 machines for 2012. The estimated January 1, 2012, inventory is 6,500 units, and the desired December 31, 2012, inventory is 7,000 units. What is the budgeted production (in units) for 2012?

The budget that needs to be completed first when preparing the master budget is the: