7.6 Questions
1) What is the sequence of steps in preparing the master budget?
A) Output from the financial budget is used to prepare the operating budget.
B) Output from the operating budget is used to prepare the financial budget.
C) Output from the financial budget is used to prepare the income statement.
D) Output from the financial budget is used to prepare the operating expense budget.
7.7 Questions
1) The first step in preparing the master budget is the ________.
A) cash budget
B) capital budget
C) operating expense budget
D) sales budget
2) The first step in preparing the operating budget is the ________.
A) cash budget
B) capital budget
C) operating expense budget
D) sales budget
3) Happy Hotels operates a 100-room property in Palm Harbor, Florida. Occupancy rates average 97% in March and 90% in April. The average room rental rate is $150 per night. Expected revenues for April are ________.
A) $405,000
B) $418,500
C) $436,500
D) $450,000
4) Full Hotels operates a 100-room property in Naples, Florida. Occupancy rates average 95% in March and 80% in April. The average room rental rate is $150 per night. Expected revenues for March are ________.
A) $372,000
B) $418,500
C) $427,500
D) $441,750
5) For next year, Dunphy Company has budgeted sales of 30,000 units, target ending inventory of 1,000 units and a beginning inventory of 800 units. How many units should be purchased?
A) 29,800
B) 30,000
C) 30,200
D) 31,800
6) For next year, Dummie Company has budgeted sales of 7,000 units, target ending inventory of 1,000 units and a beginning inventory of 300 units. How many units should be purchased?
A) 5,700
B) 6,300
C) 7,700
D) 8,300
7) Haggle Company has a sales budget for next month of $400,000. Cost of goods sold is expected to be 35% of sales. All units are paid for in the month following purchase. The beginning inventory is $10,000 and an ending inventory of $12,000 is desired. Beginning accounts payable is $76,000. The cost of goods sold for next month is ________.
A) $140,000
B) $162,000
C) $172,000
D) $220,000
8) Yesterday Company has a sales budget for next month of $300,000. Cost of goods sold is expected to be 40% of sales. All units are paid for in the month following purchase. The beginning inventory is $10,000 and an ending inventory of $12,000 is desired. Beginning accounts payable is $76,000. The purchases for next month are ________.
A) $78,000
B) $118,000
C) $120,000
D) $122,000
9) Pinto Company has the following data:
Month Budgeted Sales
January$108,000
February132,000
March144,000
April120,000
Cost of goods sold average 60% of sales. The inventory at December 31 was $19,440. Desired ending inventory levels are 30% of next month's sales at cost. What is the desired ending inventory value at February 28?
A) $23,760
B) $25,920
C) $39,600
D) $43,200
