Which of the following equations is false with respect to the direct materials budget?

Multiple Choice

• Units of raw materials needed to meet production + desired units of ending raw materials inventory units of beginning raw materials inventory = units of raw materials to be purchased

• Estimated sales in units of finished goods units of raw materials needed per unit of finished goods = units of raw materials needed to meet production

• Required production in units of finished goods units of raw materials needed per unit of finished goods = units of raw materials needed to meet production

• Units of raw materials to be purchased unit cost of raw materials = cost of raw material purchases

Which of the following statements is true regarding master budgets?

Multiple Choice

• Most companies exclude selling and administrative expenses from the master budget because they are period expenses.

• They can be used to estimate a companys need to borrow money in the future.

• They usually include a cash budget and a budgeted income statement, but not a budgeted balance sheet.

• Generally speaking, they are prepared for manufacturing companies, but not merchandising companies.

Which of the following statements is true with respect to a budgeted balance sheet?

Multiple Choice

• The ending cash balance on the balance sheet equals the ending cash balance on the cash budget.

• The ending cash balance on the balance sheet equals the net income on the income statement.

• The accounts payable balance includes the expected cash payments for material purchases that were made during the most recently completed month.

• The accounts receivable balance includes the uncollected credit sales from the most recently completed month plus the expected cash collections from credit sales that were made two months ago.