budget
1) a) In some companies, spending increases as the end of the budget period approaches, even if there are no seasonal differences. Advise what causes this.
b) In some companies when their cash budgets show an excess at month end, they do not borrow. Advise whether this is advisable.
Homework Answers
Budget:
The projection of transactions based on the available resources for a certain period is called budget. It also refers to the condensed form of preparing projections or plans for a certain period in the form of dollars.
When the spending of funds is linked up with the budget in an organization, the managers in that organization would spend the remaining amount in the budget as the yearend is approaching.
This is because; the managers would not be interested in losing the funds for the current period. In addition, this policy of spending funds would help them in detaining of creating lower budgets in future periods.
Beach Color is preparing their 2019 budget. They estimate sales/production will be between 600,00...
beach Color is preparing their 2019 budget. They estimate sales/production will be between 600,000 and 800,000 boxes of markers per month. Beach Color wants to look at both static budgets and flexible budgets to determine which is best for them. They have struggled in the past with determining whether budget variances were related to volume being above or below budget vs whether they are spending too much or too little on expenses. They want to be able to understand their...
Personal Budget At the beginning of the school year, Craig Kovar decided to prepare a cash...
Personal Budget At the beginning of the school year, Craig Kovar decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $9,050 Purchase season football tickets in September 120 310 Additional entertainment for each month Pay...
Questions are 2b (Fill the Cash Budget for May), and 3. IF UNCLEAR Requirement 2b says:...
Questions are 2b (Fill the Cash Budget for May), and
3.
IF UNCLEAR Requirement 2b says: Assume (independently for each
situation) that (1) May total revenues might be 10% lower or that
(2) total costs might be 5% higher. Under each of those two
scenarios, show the total net cash for May and the amount Best
Breath would have to borrow to cover its cash payments for May and
maintain a minimum cash balance of $300at the end of May....
Case 3 Part 1 - Cash Budget Discuss the purpose of the cash budget. If the...
Case 3 Part 1 - Cash Budget Discuss the purpose of the cash budget. If the cash for the first quarter of the fiscal year indicates excess cash at the end of each of the first two months, how might the excess cash be used? Give an example of how the capital expenditures budget affects other operating budgets. The controller of the Box Company instructs you to prepare a monthly cash budget for the next three months. You are presented...
ALL TRUE OR FALSE QUESTIONS: A) Differences between the static planning budget and the flexible budget...
ALL TRUE OR FALSE QUESTIONS: A) Differences between the static planning budget and the flexible budget show what should have happened because the actual level of activity differed from what had been planned. B) Fixed costs should not be included in a flexible budget because they do not change when the level of activity changes. C) An activity variance is the difference between an actual revenue or cost and the revenue or cost in the flexible budget that is adjusted...
a. Prepare a cash budget for September, October, November, and December. Use the minus sign to...
a. Prepare a cash budget for September, October, November, and
December. Use the minus sign to indicate the cash outflows, a
decrease in cash or cash payments.
b. Are the four monthly budgets that are presented prepared as
static budgets or flexible budgets?
c. What are the budget implications for Craig Kovar?
Craig can see that his present plan ______ sufficient cash. If
Craig did not budget but went ahead with the original plan, he
would be $______ short at...
Can you help me in part 2 Please. Oxford, Inc., is preparing its master budget for the quarter ended June 30. It se...
Can you help me in part 2 Please.
Oxford, Inc., is preparing its master budget for the quarter ended June 30. It sells a single product for $40 each. Sales are 60% cash and 40% on credit. All credit sales are collected in the month following the sale. At March 31, the balance in accounts receivable is $12,000, which represents the uncollected balance on March sales, Budgeted sales for the next four months follow: Aon May June July Sales in...
Personal Budget 210 At the beginning of the school year, Katherine Malloy decided to prepare a...
Personal Budget 210 At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $5,750 Purchase season football tickets in September Additional entertainment for each month 275 Pay...
Which of the following statements concerning budget preparation for a merchandiser is correct? A. Only an...
Which of the following statements concerning budget preparation for a merchandiser is correct? A. Only an understanding of cost behavior is required to prepare an operating expense budget. B. Operating expenses differ from operating cash outflows solely as a result of timing differences between when an expense is incurred and when an expense is paid. C. If a company requires its ending inventory to equal a set, flat amount at the end of each month, the company would be able...
Case 3 Part 1 - Cash Budget Discuss the purpose of the cash budget. If the cash for the first quarter of the fiscal year indicates excess cash at the end of each of the first two months, how might th...
Case 3 Part 1 - Cash Budget Discuss the purpose of the cash budget. If the cash for the first quarter of the fiscal year indicates excess cash at the end of each of the first two months, how might the excess cash be used? Give an example of how the capital expenditures budget affects other operating budgets. The controller of the Box Company instructs you to prepare a monthly cash budget for the next three months. You are presented...
Personal Budget At the beginning of the school year, Craig Kovar decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $9,050 Purchase season football tickets in September 120 310 Additional entertainment for each month Pay...
Questions are 2b (Fill the Cash Budget for May), and
3.
IF UNCLEAR Requirement 2b says: Assume (independently for each
situation) that (1) May total revenues might be 10% lower or that
(2) total costs might be 5% higher. Under each of those two
scenarios, show the total net cash for May and the amount Best
Breath would have to borrow to cover its cash payments for May and
maintain a minimum cash balance of $300at the end of May....
a. Prepare a cash budget for September, October, November, and
December. Use the minus sign to indicate the cash outflows, a
decrease in cash or cash payments.
b. Are the four monthly budgets that are presented prepared as
static budgets or flexible budgets?
c. What are the budget implications for Craig Kovar?
Craig can see that his present plan ______ sufficient cash. If
Craig did not budget but went ahead with the original plan, he
would be $______ short at...
Can you help me in part 2 Please.
Oxford, Inc., is preparing its master budget for the quarter ended June 30. It sells a single product for $40 each. Sales are 60% cash and 40% on credit. All credit sales are collected in the month following the sale. At March 31, the balance in accounts receivable is $12,000, which represents the uncollected balance on March sales, Budgeted sales for the next four months follow: Aon May June July Sales in...
Personal Budget 210 At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget: Cash balance, September 1 (from a summer job) $5,750 Purchase season football tickets in September Additional entertainment for each month 275 Pay...
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