Logout Open In App
Open In App
Warning: foreach() argument must be of type array|object, bool given in /var/www/html/web/app/themes/studypress-core-theme/template-parts/header/mobile-offcanvas.php on line 20

Chapter 22: 2SE (page 1228)

Budgeting types Consider the following budgets and budget types.

Cash Cost of Goods Sold

Flexible Master

Operational Sales

Static Strategic

Which budget or budget type should be used to meet the following needs?

a. Upper management is planning for the next five years.

b. A store manager wants to plan for different levels of sales.

c. The accountant wants to determine if the company will have sufficient funds to pay expenses.

d. The CEO wants to make companywide plans for the next year.

Short Answer

Expert verified
  1. Strategic budget
  2. Flexible budget
  3. Operational budget
  4. Master budget

Step by step solution

01

Upper management is planning for the next five years

The upper management’s need for planning for the next five years is a long-term goal that requires a strategic budget

02

A store manager wants to make a plan for different levels of sales.

If the store manager wants to plan for a different level of sales, then he should prepare aflexible budget.

03

The accountant wants to determine if the company will have sufficient funds to pay expenses.

To determine if the company will have sufficient funds to pay expenses the accountant should prepare anoperational budget.

04

The CEO wants to make companywide plans for the next year

If the CEO wants to make companywide plans for the next year they should prepare amaster budget.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

What budgets are included in the financial budget for a merchandising company?

Question: One benefit of budgeting is coordination and communication. Explain what this means.

Camp Company is a sporting goods store. The company sells a tent that sleeps six people. The store expects to sell 250 tents in 2018 and 280 tents in 2019. At the beginning of 2018, Camp Company has 25 tents in Merchandise Inventory and desires to have 5% of the next year’s sales available at the end of the year. How many tents will Camp Company need to purchase in 2018?

Preparing an operating budget—sales budget; inventory, purchases and COGS budget; and S&A expense budget Ballard Office Supply’s March 31, 2018, balance sheet follows:

The budget committee of Ballard Office Supply has assembled the following data.

a. Sales in April are expected to be \(160,000. Ballard forecasts that monthly sales will increase 2% over April sales in May. June’s sales will increase by 4% over April sales. July sales will increase 20% over April sales.

b. Ballard maintains inventory of \)7,000 plus 25% of the cost of goods sold budgeted for the following month. Cost of goods sold equal 50% of sales revenue.

c. Monthly salaries amount to \(3,000. Sales commissions equal 5% of sales for that month.

d. Other monthly expenses are as follows: • Rent: \)3,400 • Depreciation: 800•Insurance:300 • Income tax: $1,500

Requirements

1. Prepare Ballard’s sales budget for April and May 2018. Round all calculations to the nearest dollar.

2. Prepare Ballard’s inventory, purchases, and cost of goods sold budget for April and May.

3. Prepare Ballard’s selling and administrative expense budget for April and May.

Preparing an operating budget—direct labor budget Baker Company expects to produce 2,050 units in January and 1,994 units in February. Baker budgets five direct labor hours per unit. Direct labor costs average $9 per hour. Prepare Baker’s direct labor budget for January and February.
See all solutions

Recommended explanations on Business Studies Textbooks

Business Data Analytics

Read Explanation

Operational Management

Read Explanation

Influences On Business

Read Explanation

Managers

Read Explanation

Accounting

Read Explanation

Managerial Economics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free