Name Section BMGT 221 cid 9 Exam Simulation cid 9 Chap 9 MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question 1 Peabody Enterprises prepared the following sales budget 1 Month March April May June Budgeted Sales 6 000 13 000 12 000 14 000 The expected gross profit rate is 40 and the inventory at the end of February was 10 000 Desired inventory levels at the end of the month are 20 of the next month s cost of goods sold What is the desired ending inventory on May 31 A 8 400 cid 9 B 1 440 cid 9 C 1 120 cid 9 D 1 680 The format of the cost of goods sold inventory and purchases budget is as follows 2 A desired ending inventory beginning inventory cost of goods sold B desired ending inventory beginning inventory cost of goods sold ost of goods sold desired ending inventory beginning inventory D cost of goods sold desired ending inventory beginning inventory During July Johnson Company had actual sales of 150 000 compared to budgeted sales of 162 000 Actual cost of goods sold was 105 500 compared to a budget of 108 300 Monthly operating expenses budgeted at 22 400 totaled 20 000 Interest revenue of 2 000 was earned during July but had not been included in the budget The performance report for July would show a net income variance of 3 cid 9 L A 9 600 Favorable cid 9 C 9 600 Unfavorable cid 9 4 800 Unfavorable D 4 800 Favorable TrWhich of the following budgets is part of the operating budgets cid 9 i 1 cid 9 DC cid 9 0 Co c r t 1 CA1 Z 00 C7 7 A Budgeted balance sheet aproduction budget Capital expenditure budget Cash budget P M R L r cid 9 cid 9 cid 9 Zevok Company budgeted 4 million for customer service costs but actually spent only 3 cid 9 million Which of the following statements is the BEST course of action for management to take in this instance 5 A A anagement will investigate this 1 million favorable variance to ensure that the cost savings do not reflect skimping on customer service Because this 1 million variance is favorable management does not need to investigate further Management will investigate this 1 million unfavorable variance to try to identify and Management should not investigate every major variance especially the unfavorable correct the problem ones 4 Purchases for May were 60 000 while expected purchases for June and July are 75 000 and 6 92 000 respectively All purchases are paid 30 in the month of purchase and 70 the following month At what amount are June payments for purchases budgeted cid 9 Mo ijO cid 9 t i I A 92 100 cid 9 64 500 C 70 500 cid 9 D 86 900 7 cC loud Company has budgeted the following credit sales during the last four months of the cid 9 7 x cid 9 L 7 Y 0010c O S year September 16 000 October 22 000 November 21 000 December 24 000 Experience has shown that payment for the credit sales is received as follows 15 in the month of sale 60 in the first month after sale 20 in the second month after sale and 5 uncollectible How much cash can McCloud Company expect to collect in November as a result of credit sales cid 9 p4 7 t 000 A 16 350 cid 9 6V 19 550 cid 9 C 19 800 cid 9 D 16 400 o x u i t 000 c cid 9 4 000 K 8 M hich of the following budgets is part of the financial budgets cid 9 A Operating expense budget cid 9 C Sales budget cid 9 Cash budget D Direct materials budget 9 Desired ending inventory is 80 of beginning inventory If cost of goods sold is 300 000 cid 9 9 which of the following statements is TRUE regarding purchases 14 A Purchases will equal cost of goods sold B Purchases will be 80 of cost of goods sold C Purchases will be less than cost of goods sold D Purchases will be more than cost of goods sold cid 9
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