3. Lowe Company produces golf bags. Finished goods inventory beginning balance for the coming year is budgeted to be 195 bags. Sales for the coming year are budgeted to be 2,900 bags. The companys policy is to have a finished goods inventory ending balance that is equal to 15% of the sales for the year. What is the budgeted production of golf bags for the coming year? SHOW YOUR WORK.

4. Branham Company has budgeted next years production of golf shirts to be 3,200 shirts. Each golf shirt requires 1.5 yards of Material A. The company has budgeted the beginning balance for Raw Materials Inventory-Material A to be 225 yards. The companys policy is to have a Raw Materials Inventory ending balance that is equal to 20% of the periods usage. What is the estimated purchase of Material A for next year? SHOW YOUR WORK.

5. Askew Company purchases golf balls for cash and resells them at a profit. The golf balls cost $2.00 each. The company has budgeted 15,000 balls Merchandise Inventory at the end of June and keeps an ending balance in Merchandise Inventory that is equal to the number of golf balls needed for the next months sales. The company has estimated the following sales for the third quarter of the year:

Month Sales

July 15,000

August 20,000

September 25,000

What are the estimated cash disbursements for August? SHOW YOUR WORK.

6. Sharons Fabrics is anticipating sales of 2,900 yards of product M and 3,760 yards of product N at $9.50 and $24.50 per yard respectively for September. Terms of sales are 30% cash at the time of sale, 50% in 30 days, and 20% in 60 days. What are the estimated cash receipts for October? SHOW YOUR WORK.

7. What is meant by padding the budget?

Padding the budget means making the budget proposal larger than the actual estimates for the project. This is done either by increasing a project's expenses or decreasing its expected revenue.

8. What is the definition of participatory budgeting?

Participative budgeting is the process of allowing employees throughout the organization to have a significant role in developing the budget. Participative budgeting can result in greater commitment to meet the budget by those who participated in the process.

9. Wilson, Inc., has developed these variable costs for the production of one unit of product:

Direct Material 2.0 pounds @ 12 = $24.00

Direct Labor 1.5 hours @ $15 = $22.50

Variable Overhead 120% of direct labor cost

Fixed overhead is estimated to be $315,000.

What is the total amount of overhead budgeted for a month in which production is expected to be 11,000 units?

10. What are two characteristics of zero-based budgeting?