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QUESTION 5 A budget built from the ground up each year rather than by simply adding a percentage increase to last year's numbers is called: O a zero-based budget O a static budget O a master budget O a flexible budget QUESTION 6 Last year, Garrison Manufacturing sold 500 000 units at $4 each. Sales volume is expected to increase by 15% in the upcoming year, and sales price is expected to decrease by 5% in the upcoming year. The expected sales revenue for the upcoming year is: O $2 255 000 O $2 000 000 O $2 645 000 O $2 185 000 QUESTION 7 Refer to the Karla Inc. information below. Karla Inc. manufactures tents under various brand names. The company sells most of its hammocks in the second quarter of each year. Their production budget for the second quarter shows the following number of hammocks needs to be produced: April 7000 units May 15 000 units June 25 000 units Each unit requires 25 feet of cotton rope cord which costs $0.60 per foot. The company has determined that it needs 20 per cent of next month's raw material needs on hand at the end of each month. In addition, each hammock requires 55 minutes of direct labour for assembly and inspection at a cost of $0.45 per minute. The company currently applies manufacturing overhead to production at the rate of $9.50 per direct labour hour. The total cost of direct labour and manufacturing overhead for the month of May is: $501 775 O $501 875 O $635 201 $201 775 QUESTION 8 Avery Inc. would like to prepare summary cash budget for June. The following information is available: The cash balance at 1 June was estimated to be $15 000. June sales, all on account, were estimated to be $85 000. Sales are collected over a two-month period with 60 per cent collected in the month of sale and the remainder in the subsequent month. May sales on account were $75 000. Inventory purchases are expected to be $60 000 in June. The company pays for one-half of inventory purchases in the month of purchase and the remainder in the subsequent month. May purchases were $50 000. Cash disbursements for selling and administrative expenses are expected to be $7000 in June. Depreciation expense for June is expected to be $4000. What is the cash balance at the end of June expected to be? O $29 000 O $34 000 O $28 500 O $32 500