ACCT 5302 Exam 2 - Multiple Choice Review Questions and AnswersQA

1. The materials purchase budget: 
A. is the beginning point in the budget process.
B. must provide for desired ending inventory as well as for production.
C. is accompanied by a schedule of cash collections.
D. is completed after the cash budget.

2. Which of the following budgets are prepared before the sales budget?
   
A. Option A
B. Option B
C. Option C
D. Option D

3. There are various budgets within the master budget. One of these budgets is the production budget. Which of the following BEST describes the production budget? 
A. It details the required direct labor hours.
B. It details the required raw materials purchases.
C. It is calculated based on the sales budget and the desired ending inventory.
D. It summarizes the costs of producing units for the budget period.

4. Tolla Company is estimating the following sales for the first six months of next year:

  
Sales at Tolla are normally collected as 70% in the month of sale, 25% in the month following the sale, and the remaining 5% being uncollectible. Also, those customers paying in the month of sale are given a 2% discount. Based on this information, how much cash should Tolla expect to collect during the month of April? 
A. $281,260
B. $361,260
C. $366,010
D. $393,760