Reference no: EM13214935
1. What is the benefit of continuous budgeting?
2. Why should each department participate in preparing its own budget?
3. How does budgeting help management coordinate and plan business activities?
4. Walker Company prepares monthly budgets. The current budget plans for a September ending inventory of 30,000 units. Company policy is to end each month with merchandise inventory equal to a specified percent of budgeted sales for the following month. Budgeted sales and merchandise purchases for the three most recent months follow.
(1) Prepare the merchandise purchases budget for the months of July, august, and September.
(2) Compute the ratio of ending inventory to the next month's sales for each budget prepared in (1).
(3) How many units are budgeted for sale in October?
Sales (units) Purchases (units)
July..........................180,000 200,250
August...................315,000 308,250
September............270,000 259,500
5. Foyert Corp requires a minimum $30,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on October 1 is $30,000 and the company has an outstanding loan of $10,000. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow. Prepare a cash budget for October, November, and December. Round interest payment to the nearest whole dollar.
October November December
Cash receipts................................110,000 80,000 100,000
Cash disbursements...................120,000 75,000 80,000
6. Hospitable Co. provides the following sales forecast for the next four months:
April May June July
Sales..............500 580 540 620
The company wants to end each month with ending finished goods inventory equal to 25% of next month's sales. Finished goods inventory on April 1 is 190 units. Assume July's budgeted production is 540 units. Prepare a production budget for the months of April, May, and June.
7. Write a half page summary offering a solution to the "use it or lose it" budgeting problem where managers spend the remaining budget amounts at the end of a budget period.
|
Punishment is most effective in socializing a child
: Punishment is most effective in socializing a child when the child:
|
|
Explain the payout policy of firms
: Assess the growth of the firm in terms of its amount of total assets. Where have funds for growth come from? How does this relate to the firm's payout policy
|
|
Rogers and freud disagree
: About which of the following statements would rogers and Freud disagree?
|
|
Explain the company wishes to know the market value
: An oil company has paid $100,000 for the right to pump oil on a plot of land during the next three years. A well has already been sunk and all other necessary facilities are in place. The land has known reserves of 60,000 barrels. The company wish..
|
|
How many units are budgeted for sale in october
: Foyert Corp requires a minimum $30,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on October 1 is $3..
|
|
Explain the risks associated with leveling resources
: Explain the risks associated with leveling resources, compressing or crashing projects and imposed durations or “catch-up” as the project is being implemented
|
|
Bonus issue the share price should fall
: One financial analyst commented: "P/E ratio of SOUAET shares is 20, based on the current share price. After the bonus issue the share price should fall to 10 yuan, with the result that the P/E ratio should fall to 10.
|
|
Explain what is the net income of the firm for the year
: cost of goods sold, $450,000 in operating expenses (including a depreciation expense of $150,000), with a tax liability equal to 35% of the firm's taxable income. What is the net income of the firm for the year?
|
|
How does this revenue mix compare with the revenue blend
: An opportunity exists to explore the greater social and political questions that are frequently debated about the compatibility of profit-oriented entities and quality of health care, relative to not-for-profit entities.
|