Master Budget

The first step in planning and control is

• preparation of the budget

• performance evaluation

• strategic planning

• setting long-term objectives

Financial budgeting refers to

• all budgets of the firm

• budgets for cash flows

• budgets for sales

• budgets for production

Which of the following budgets concerns the income-generating activities of the firm?

• operating budget

• financial budget

• capital budget

• all of the above

The first step in the budgeting process is the preparation of the

• production budget

• selling and administrative expenses budget

• sales forecast

• cash budget

In the production budget, the total units to be produced is computed as

• expected sales - desired ending inventory - beginning inventory

• expected sales + desired ending inventory + beginning inventory

• expected sales - desired ending inventory + beginning inventory

• expected sales + desired ending inventory - beginning inventory

Jiggy Company plans to sell 33,000 units during the month of May. The company plans to have 2,500 units on hand at the end of the month. If 1,200 units are on hand on May 1, how many units must be produced during May?

• 33,000

• 35,500

• 34,300

• 31,800

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. The company maintains a raw materials inventory equal to 20 percent of the following month's production needs.

Budgeted production in units for February would be

• 131,000

• 107,000

• 83,000

• 80,000

Feedee Company has budgeted sales and production (in units) over the next three months shown in the data.

There are 10,000 units on hand on January 1. A minimum of 20 percent of the next month's sales in units must be on hand at the end of each month. April sales are expected to be 70,000. Budgeted sales for February would be

• 64,000

• 78,000

• 60,000

• 52,000