University:
Grand Rapids Community College
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

105

Pages:

2
Author:

stud_ice13

Here are the solutions for Exercises 20-1, 20-2, and 20-3: Exercise 20-1: Budget Language Match the definitions with the terms: 1. Participatory budgeting: Employees affected by a budget help in preparing it. → f 2. Cash budget: Helps determine financing needs. → a 3. Master budget: A comprehensive plan that consists of several budgets that are linked. → b 4. Budgetary slack: A budgetary cushion used to meet performance targets. → d 5. Sales budget: The usual starting point in the master budget process. → e 6. Budgeted income statement: A report that shows predicted revenues and expenses for a budgeting period. → c Exercise 20-2: Revising Budgeted Sales Problem: MM Co. budgets sales of $30,000 for May. MM's product will receive better placement due to sustainable packaging, resulting in an 8% sales increase. Compute the revised budgeted sales. Solution: Budgeted Sales Increase=30,000×0.08=2,400 Revised Budgeted Sales=30,000+2,400=32,400 Exercise 20-3: Manufacturing Production Budget Problem: Ruiz Co. budgeted sales for the next four months. The ending inventory is required to be 25% of next month's sales. April 1 inventory is 125 units. Prepare the production budget for April, May, and June. Budgeted Ending Inventory Total Required Month Sales (25% of next (Sales + Ending month’s sales) (Units) Inventory) April Given the Given in conditions for sales budget production of units Beginning Inventory Units to Produce (Total Required Beginning Inventory)