Whitaker Company budgets payroll at $3,000 per month plus a percentage of monthly sales. The June operating expense budget includes total payroll of $10,500 with budgeted sales of $150,000. Sales for July are budgeted at $165,000 while purchases of inventory for July are budgeted at $85,000. Depreciation and insurance for July are estimated at $750 and $500, respectively. Expenses related to purchasing inventory are budgeted at 5% of purchases for the month. The purchase of $3,000 in equipment and $1,200 in furniture is expected in July.

Whitaker Company budgets payroll at $3,000 per month plus a percentage of monthly sales. The June operating expense budget includes total payroll of $10,500 with budgeted sales of $150,000. Sales for July are budgeted at $165,000 while purchases of inventory for July are budgeted at $85,000. Depreciation and insurance for July are estimated at $750 and $500, respectively. Expenses related to purchasing inventory are budgeted at 5% of purchases for the month. The purchase of $3,000 in equipment and $1,200 in furniture is expected in July.

1)        Refer to Case 21-2. The July payroll should be budgeted at what amount? A)  $8,250

B) $11,250 

 C) $11,550 

D)  $14,550

2)        Refer to Case 21-2. What are the total operating expenses budgeted for July?

A) $16,750 

 B) $17,050 

C) $20,950 

D)  $21,250

3)        Refer to Case 21-2. If the percentage used to budget payroll increased 20%, what would the total payroll budgeted for July be?

A) $12,900 B) $13,500 C) $13,860 D)  $44,250

4)        The                         budget projects cash inflows and outflows and the budgeted balance sheet.

A)      purchases

B)       capital expenditures

C)       cash

D)  financial

5)        Which of the following is an example of a financial budget?

A)      sales budget

B)     budgeted balance sheet

C)     budgeted income statement

D)   operating expenses budget

6)        Which of the following is NOT considered when preparing the cash budget?

A)   depreciation expense

B)       cash receipts from customers

C)       payments for inventory

D)      cash payments to suppliers

7)        The preparation of which of the following is the final step in the preparation of the financial budget?

A)      master budget

B)       budgeted balance sheet

C)   budgeted statement of cash flows

D)   cash budget

8)        Bolin’s, an elite clothier, expects its November sales to be 30% higher than its October sales of

$200,000.  Purchases were $100,000 in October and are expected to be $150,000 in November.  All sales are on credit and are collected as follows: 30% in the month of the sale and 70% in the following month. Purchases are paid 25% in the month of purchase and 75% in the following month. The cash balance on November 1 is $9,000.  What will the cash balance on November 30 be?

A)  $87,000 B) $114,500 C) $140,000 D)  $149,000

Thanks