Q&A Hero

Q: Static budget is another name for: A. Standard budget. B. Flexible budget. C. Variable budget. D. Fixed budget. E. Master budget.

Q: A report based on predicted amounts of revenues and expenses corresponding to the actual level of output is called a: A. Rolling budget. B. Production budget. C. Flexible budget. D. Merchandise purchases budget. E. Fixed budget.

Q: A planning budget based on a single predicted amount of sales or production volume is called a: A. Sales budget. B. Standard budget. C. Flexible budget. D. Fixed budget. E. Variable budget.

Q: An analytical technique used by management to focus on the most significant variances and give less attention to the areas where performance is satisfactory is known as: A. Controllable management. B. Management by variance. C. Performance management. D. Management by objectives. E. Management by exception.

Q: A company provided the following direct materials cost information. Compute the cost variance. Standard costs assigned: Direct materials standard cost (405,000 units @ $2/unit $810,000 Actual costs Direct Materials costs incurred (403,750 units @ $2.20/unit) $888,250 A. $2,500 Favorable. B. $78,250 Favorable C. $78,250 Unfavorable D. $80,750 Favorable. E. $80,750 Unfavorable.

Q: Standard costs are used in the calculation of: A. Price and quantity variances. B. Price variances only. C. Quantity variances only. D. Price, quantity, and sales variances. E. Quantity and sales variances.

Q: A process of examining the differences between actual and budgeted costs and describing them in terms of the amounts that resulted from price and quantity differences is called: A. Cost analysis. B. Flexible budgeting. C. Variable analysis. D. Cost variable analysis. E. Variance analysis.

Q: The difference between the actual cost incurred and the standard cost is called the: A. Flexible variance. B. Price variance. C. Cost variance. D. Controllable variance. E. Volume variance.

Q: The difference between actual and standard cost caused by the difference between the actual quantity and the standard quantity is called the: A. Controllable variance. B. Standard variance. C. Budget variance. D. Quantity variance. E. Price variance.

Q: The difference between actual and standard cost caused by the difference between the actual price and the standard price is called the: A. Standard variance. B. Quantity variance. C. Volume variance. D. Controllable variance. E. Price variance.

Q: The costs that should be incurred under normal conditions to produce a specific product or component or to perform a specific service are: A. Variable costs. B. Fixed costs. C. Standard costs. D. Product costs. E. Period costs.

Q: Standard costs are: A. Actual costs incurred to produce a specific product or perform a service. B. Preset costs for delivering a product or service under normal conditions. C. Established by the IMA. D. Rarely achieved. E. Uniform among companies within an industry.

Q: If cost variances are material, they should always be closed directly to Cost of Goods Sold.

Q: A volume variance is the difference between overhead at maximum production volume and that at the budgeted production volume.

Q: An overhead cost variance is the difference between the actual overhead incurred for the period and the standard overhead applied.

Q: One possible explanation for direct labor rate and efficiency variances is the use of workers with different skill levels.

Q: A favorable direct materials price variance might lead to an unfavorable direct materials quantity variance because the company purchased inferior materials.

Q: When the actual cost of direct materials used exceeds the standard cost, the company must have experienced an unfavorable direct materials price variance.

Q: A direct labor cost variance may be broken down into a controllable variance and a volume variance.

Q: The purchasing department is often responsible for the price paid for materials that may create a direct materials price variance.

Q: A flexible budget expresses variable costs on a per unit basis and fixed costs on a total basis.

Q: Although a fixed budget is only useful over the relevant range of operations, a flexible budget is useful over all possible production levels.

Q: Sales variances may be computed in a manner similar to cost variancesthat is, computing both price and volume variances.

Q: Sales variances allow managers to focus on sales mix as well as sales quantities.

Q: A fixed budget performance report never provides useful information for evaluating variances.

Q: A variable or flexible budget is so named because it only focuses on variable costs.

Q: The ______________________________ shows the budgeted costs for direct materials, direct labor, and overhead, based on the budgeted production volume from the production budget.

Q: The ___________ shows expected cash inflows and outflows during the budget period.

Q: The budget that lists the dollar amounts to be both received from plant asset disposals and spent to purchase additional plant assets to carry out the budgeted business activities is the __________________________.

Q: ___________________________ is a budget system based on expected activities and their levels that enables management to plan for resources required to perform the activities.

Q: The master budget process nearly always begins with the preparation of the ___________________ and usually finishes with the preparation of the ______________________, the ________________, and the ______________________.

Q: A ________________________ is a continuously revised budget that adds future months or quarters to replace months or quarters that have lapsed.

Q: There are at least five benefits from budgeting. Identify two of these benefits: (1) _______________________________________ (2) _______________________________________

Q: Use the following information to prepare a budgeted balance sheet Magee Company for the month of June. a. The budgeted net income for the month of June is $236,000. b. The beginning cash balance is $62,000; budgeted cash receipts are $1,660,000; budgeted cash disbursements are $1,580,000. c. Budgeted sales for May and June are $1,600,000 and $1,700,000 respectively. Collections are 40% in the month of sale and 60 % in the month following. d. The projected inventory balance is 10% of the following months sales. Sales for July are projected to be $1,750,000. e. Purchases of inventory are paid 80% in the month of purchase, and 20% in the month following. Budgeted purchases for June are $900,000. f. The equipment account balance is $1,400,000 on June 30. On May 31, the accumulated depreciation on equipment is $276,000. Depreciation expense for June is estimated to be $24,000. g. There is an outstanding loan balance of $800,000. h. Accrued income taxes payable for June 30 are $71,000; and accrued salaries payable are $50,000. i. The only other balance sheet accounts are: Common Stock, with a balance of $800,000 on May 31, and Retained Earnings with a balance of $300,000 on May 31.

Q: Use the following information to prepare a budgeted income statement for Arbor Company for the month of June. a. Beginning cash balance on June 1 is $52,000. b. Cash receipts from sales: 40% is collected in the month of sale, 50% in the next month, and 10% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: April (actual), $1,450,000, May (actual), $1,600,000, and June (budgeted), $1,700,000. c. Payments on merchandise purchases: 80% in the month of purchase and 20% in the month following purchase. Purchases amounts are May (actual), $830,000; and June (budgeted), $867,000. d. Budgeted cash disbursements for salaries in June: $260,000. Salaries payable on May 31 are $60,000 and are expected to be $50,000 on June 30. e. Budgeted depreciation expense for June: $24,000. f. Other cash expenses budgeted for June: $282,000. g. Accrued income taxes due in June: $48,000. h. Bank loan interest due in June: $8,000 which represents the 1% monthly expense on a bank loan of $800,000. i. Loan payment of $50,000 if the preliminary cash balance is greater than $100,000. j. Cost of goods sold is 53% of sales. k. The income tax rate applicable to the company is 30%.

Q: Use the following information to prepare the June cash budget for Arbor Company. It should show expected cash receipts and cash disbursement for the month and the cash balance expected on June 30. a. Beginning cash balance on June 1 is $52,000. b. Cash receipts from sales: 40% is collected in the month of sale, 50% in the next month, and 10% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: April (actual), $1,450,000, May (actual), $1,600,000, and June (budgeted), $1,700,000. c. Payments on merchandise purchases: 80% in the month of purchase and 20% in the month following purchase. Purchases amounts are May (actual), $830,000; and June (budgeted), $867,000. d. Budgeted cash disbursements for salaries in June: $260,000. e. Budgeted depreciation expense for June: $24,000. f. Other cash expenses budgeted for June: $282,000. g. Accrued income taxes due in June: $48,000. h. Bank loan interest due in June: $8,000. i. Loan payment of $50,000 if the preliminary cash balance is greater than $100,000.

Q: Clic, Inc., provides the following data for the next four months: April May June July Units Sales 500 580 530 600 Ending Raw Materials Inventory . 663 lbs. Ending Finished Goods Inventory ... 174 Units Desired Ending Inventory: Raw Materials = 30% of next month's production needs Finished Goods = 20% of next month's sales Pounds of raw material required for each finished Unit = 5 lbs. Required: Calculate the amount of purchases of raw materials in pounds for April and May.

Q: David, Inc., is preparing its master budget for the second quarter. The following sales and production data have been forecasted: April May June July August Unit sales 400 500 520 480 540 Finished goods inventory on March 31: 120 units Raw materials inventory on March 31: 450 pounds Desired ending inventory each month: Finished goods: 30% of next month's sales Raw materials: 25% of next month's production needs Number of pounds of raw material required per finished unit: 4 lb. How many pounds of raw materials should be purchased in April?

Q: The production budget for Sergei Company revealed the following production volume for the months of July September. Each unit produced requires 2 hours of direct labor. The direct labor rate is currently $16 per hour but is predicted to be $16.75 per hour in September. Prepare a direct labor budget for Sergei Company for July September. July Aug Sept Units to be produced 620 680 540

Q: Peru, Inc. is preparing its master budget for the first quarter of its calendar year. The following forecasted data relate to the first quarter: Unit sales: January .. 40,000 February 60,000 March 50,000 Unit sales price . $25 Cost of goods sold per unit ... $14 Expenses: Commissions 10% of sales Rent .. $20,000/month Advertising .. 15% of sales Office salaries .. $75,000/month Depreciation . $50,000/month Interest .. 15% annually on a $250,000 note payable Tax rate 40% Prepare a budgeted income statement for this first quarter.

Q: Sweeny Co. is preparing a cash budget for the second quarter of the coming year. The following data have been forecasted: April May Sales . $150,000 $157,500 Merchandise purchases 107,000 112,400 Operating expenses: Payroll . 13,600 14,280 Advertising . 5,400 5,700 Rent . 1,500 1,500 Depreciation 7,500 7,500 End of April balances: Cash . 40,000 Bank loan payable 16,000 Additional data: (1) Sales are 40% cash and 60% credit. The collection pattern for credit sales is 50% in the month following the sale and 50% in the month thereafter. Total sales in March were $125,000. (2) Purchases are all on credit, with 40% paid in the month of purchase and the balance paid in the following month. (3) Operating expenses are paid in the month they are incurred. (4) A minimum cash balance of $40,000 is required at the end of each month. (5) Loans are used to maintain the minimum cash balance. At the end of each month, interest of 1% per month is paid on the outstanding loan balance as of the beginning of the month. Repayments are made whenever excess cash is available. Prepare the company's cash budget for May. Show the ending loan balance at May 31.

Q: Del Carpio, Inc., sells two products, Widgets and Gadgets. The sales forecast in units for the first quarter of the coming year is: Widgets Gadgets January.. 20,000 36,000 February 28,000 60,000 March 36,000 64,000 Cash sales are 30% of each product's monthly sales. The remaining sales are credit sales which are collected as follows: 70% in the month of sale, 20% the next month, and 10% in the following month. Unit sale prices are $30 and $20 for Widgets and Gadgets, respectively. Determine the company's cash receipts for March from its current and past sales.

Q: The following information is available for Hammel Company: a. The Cash Budget for March shows a bank loan of $10,000 and an ending cash balance of $48,000. b. The Sales Budget for March indicates sales of $120,000. Accounts receivable is expected to be 70% of the current-month sales. c. The Merchandise Purchases Budget indicates that $90,000 in merchandise will be purchased in March on account and ending inventory for March is predicted to be 600 units @ $35. Purchases on account are paid 100% in the month following the purchase. d. The Budgeted Income Statement shows a net income of $48,000 and $26,000 in income tax expense for the quarter ended March 31. Accrued taxes will be paid in April. e. The Balance Sheet for February shows equipment of $84,000 with accumulated depreciation of $30,000, common stock of $25,000 and ending retained earnings of $8,000. There are no changes budgeted in the equipment or common stock accounts. Prepare a budgeted balance sheet for March.

Q: Slim Corp. requires a minimum $8,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Loans are repaid at month's end from any excess cash. The cash balance on July 1 is $8,400. Cash receipts other than for loans received for July, August, and September are forecasted as $24,000, $32,000, and $40,000, respectively. Payments other than for loan or interest payments for the same period are planned at $28,000, $30,000, and $32,000, respectively at July 1, there are no outstanding loans. Required: Prepare a cash budget for July, August, and September.

Q: Use the following data to determine the company's cash disbursements for each month of August and September:

Q: Rich Company's experience shows that 20% of its sales are for cash and 80% are on credit. An analysis of credit sales shows that 50% are collected in the month following the sale, 45% are collected in the second month, and 5% prove to be uncollectible. Calculate August September October November Sales .. $500,000 $525,000 $535,000 $560,000 October November (1) Receipts from cash sales ... (1) (6) (2) Collections from August credit sales (2) (7) (3) Collections from September credit sales (3) (8) (4) Collections from October credit sales ... (4) (9) (5) Total cash collections during the month (5) (10)

Q: Airtex Company budgeted the following credit sales during the current year: September, $90,000; October, $123,000; November, $105,000; December, $111,000. Experience has shown that cash from credit sales is received as follows: 10% in the month of sale, 50% in the first month after sale, 35% in the second month after sale, and 5% is uncollectible. How much cash should Airtex Company expect to collect in November from all current and past credit sales?

Q: Miles Company is preparing a cash budget for February. The company has $30,000 cash at the beginning of February and anticipates $75,000 in cash receipts and $96,250 in cash disbursements during February. Miles Company has an agreement with its bank to maintain a cash balance of $10,000. What amount, if any, must the company borrow during February to maintain a $10,000 cash balance?

Q: Cambridge, Inc., is preparing its master budget for the quarter ended June 30. It sells a single product for $40 each. Sales are 60% cash and 40% on credit. All credit sales are collected in the month following the sale. At March 31, the balance in accounts receivable is $12,000, which represents the uncollected balance on March sales. Budgeted sales for the next four months follow: April May June July Sales in Units .. 800 1,000 600 1,200 The product cost is $20 per unit, and desired ending inventory is 60% of the following month's sales in units. Inventory at March 31 is 480 units. Purchases are paid 50% in the month of purchase and 50% in the following month. At March 31, the balance in accounts payable is $11,000, which represents the unpaid purchases from March. Operating expenses are paid in the month incurred and consist of: Commissions (10% of sales) Shipping (3% of sales) Office salaries ($3,000 per month) Rent ($5,000 per month) Depreciation is $2,000 per month. Income taxes are 40%, and will be paid on July 1. There are no taxes payable at March 31. A minimum cash balance of $12,000 is required, and the beginning cash balance is $12,000. Loans are obtained at the end of any month when a cash shortage occurs. Interest is 1% per month based on the beginning of the month loan balance and is paid at each month end. If an excess balance of cash exists, loans are repaid at the end of the month. At March 31, the loan balance is $2,000. Prepare a master budget (round all dollar amounts to the nearest whole dollar) for each of the months of April, May, and June that includes the: Sales budget Table of cash receipts Merchandise purchases budget Table of cash disbursements for purchases of merchandise Table of cash disbursements for selling and administrative expenses Cash budget, including information on the loan balance Budgeted income statement

Q: Tappet Corporation is preparing its master budget for the quarter ending March 31. It sells a single product for $25 a unit. Budgeted sales are 40% cash and 60% on credit. All credit sales are collected in the month following the sales. Budgeted sales for the next four months follow: January February March April Sales in Units . 1,200 1,000 1,600 1,400 At December 31, the balance in accounts receivable is $10,000, which represents the uncollected portion of December sales. The company desires merchandise inventory equal to 30% of the next month's sales in units. The December 31 balance of merchandise inventory is 340 units, and inventory cost is $10 per unit. Forty percent of the purchases are paid in the month of purchase and 60% are paid in the following month. At December 31, the balance of Accounts Payable is $8,000, which represents the unpaid portion of December's purchases. Operating expenses are paid in the month incurred and consist of: Sales commissions (10% of sales) Freight (2% of sales) Office salaries ($2,400 per month) Rent ($4,800 per month) Depreciation expense is $4,000 per month. The income tax rate is 40%, and income taxes will be paid on April 1. A minimum cash balance of $10,000 is required, and the cash balance at December 31 is $10,200. Loans are obtained at the end of a month in which a cash shortage occurs. Interest is 1% per month, based on the beginning of the month loan balance, and must be paid each month. If an excess of cash exists, loan repayments are made at the end of the month. At December 31, the loan balance is $0. Prepare a master budget (round all dollar amounts to the nearest whole dollar) for each of the months of January, February, and March that includes the: Sales budget Table of cash receipts Merchandise purchases budget Table of cash disbursements for merchandise purchases Table of cash disbursements for selling and administrative expenses Cash budget, including information on the loan balance Budgeted income statement

Q: Pantheon Company has prepared the following forecasts of monthly sales: July August September October Sales (in Units) .. 4,500 5,300 4,000 3,700 Pantheon has decided that the number of units in its inventory at the end of each month should equal 25% of the next month's sales. The budgeted cost per unit is $30. (1) How many units should be in July's beginning inventory? (2) What amount should be budgeted for the cost of merchandise purchases in July? (3) How many units should be purchased in September?

Q: Nano, Inc. is preparing its budget for the second quarter. The following sales data have been forecasted: April May June July August Unit sales.. 640 720 780 620 660 Additional information follows: Inventory on March 31: 192 Units Desired ending inventory each month: 30% of next month's sales How many units should be purchased in April, May, and June? How many units should be purchased in the second quarter in total?

Q: In preparing a budget for the last three months of the current year, Urban Company is planning the units of merchandise it must order each month. The company's policy is to have 15% of the next month's sales in its inventory at the end of each month. Projected sales for October, November, and December are 27,000 units, 29,500 units, and 32,500 units, respectively. How many units must be ordered in November?

Q: A department store has budgeted cost of goods sold for August of $60,000 for its women's coats. Management wants to have $12,000 of coats in inventory at the end of the month to prepare for the winter season. Beginning inventory in August was $8,000. What dollar amount of coats should be purchased to meet the above plans?

Q: What is a cash budget? How can management use a cash budget?

Q: What is a merchandise purchases budget? How is the merchandise purchases budget constructed?

Q: Briefly describe a master budget and the sequence in which the individual budgets within the master budget are prepared.

Q: List the three important guidelines that should be followed in the budgeting process.

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Q: Grafton budgets production of 300 units in June and 310 units in July. Each unit requires 1.5 hours of direct labor. The direct labor rate if $14 per hour. The indirect labor rate is $21.00 per hour. Compute the budgeted direct labor cost for July. A. $6,300. B. $6,510. C. $9,450. D. $9,765. E. $16,275.

Q: Grafton budgets production of 300 units in June and 310 units in July. Each finished unit requires 4 pounds of raw material K, which costs $5 per pound. Each months ending inventory of raw materials should be 30% of the following months budgeted production. The June 1 raw materials inventory has 360 pounds of raw material K. Compute budgeted purchases for raw material K for June. A. 1,200 lbs. B. 1,240 lbs. C. 1,212 lbs. D. 1,220 lbs. E. 880 lbs.

Q: Keegan Company manufactures a single product and has a JIT policy that ending inventory must equal 10% of the next months sales. It estimates that Mays ending inventory will consist of 20,000 units. June and July sales are estimated to be 280,000 and 290,000 units, respectively. Compute the number of units to be produced that would appear on the companys production budget for the month of June. A. 288,000. B. 260,000. C. 289,000. D. 280,000. E. 309,000.

Q: Use the following information to determine the ending cash balance to be reported on the month ended June 30 cash budget. a. Beginning cash balance on June 1, $94,000. b. Cash receipts from sales, $413,000. c. Budgeted cash disbursements for purchases, $268,000. d. Budgeted cash disbursements for salaries, $95,000. e. Other budgeted expenses, $57,000. f. Cash repayment of bank loan, $32,000. g. Budgeted depreciation expense, $34,000. A. $55,000. B. $21,000. C. $87,000. D. $112,000. E. $78,000.

Q: Kent Companys May sales budget calls for sales of $900,000. The store expects to begin May with $50,000 of inventory and to end the month with $55,000 of inventory. Gross margin is typically 45% of sales. Compute the budgeted cost of merchandise purchases for May. A. $550,000. B. $500,000. C. $495,000. D. $460,000. E. $490,000.

Q: Kyoto, Inc. predicts the following sales in units for the coming four months: April May June June Sales in Units .. 240 280 300 240 Although each month's ending inventory of finished units should be 60% of the next month's sales, the March 31 finished goods inventory is only 100 units. A finished unit requires five pounds of raw material B. The March 31 raw materials inventory has 200 pounds of B. Each month's ending inventory of raw materials should be 30% of the following month's production needs. The budgeted purchases of pounds of raw material B during May should be: A. 1,418 lb. B. 1,460 lb. C. 1,502 lb. D. 264 lb. E. 283 lb.

Q: Kyoto, Inc. predicts the following sales in units for the coming four months: April May June June Sales in Units .. 240 280 300 240 Although each month's ending inventory of finished units should be 60% of the next month's sales, the March 31 finished goods inventory is only 100 units. A finished unit requires five pounds of raw material B. The March 31 raw materials inventory has 200 pounds of B. Each month's ending inventory of raw materials should be 30% of the following month's production needs. The budgeted production for May is: A. 200 units. B. 212 units. C. 268 units. D. 280 units. E. 292 units.

Q: A plan that states the number of units to be manufactured during each future period covered by the budget, based on the budgeted sales for the period and the levels of inventory needed to support future sales, is the: A. Sales budget. B. Merchandise purchases budget. C. Production budget. D. Cash budget. E. Manufacturing budget.

Q: Which of the following budgets is part of the manufacturing budget? A. Sales budget. B. Direct materials budget. C. Production budget. D. Merchandise purchases budget. E. Cash budget.

Q: To determine the production budget for an accounting period, consideration is given to all of the following except: A. Budgeted ending inventory. B. Budgeted beginning inventory. C. Budgeted sales. D. Budgeted overhead. E. Ratio of inventory to future sales.

Q: A plan that shows the predicted costs for direct materials, direct labor, and overhead to be incurred in manufacturing the units in the production budget is called the: A. Sales budget. B. Merchandise purchases budget. C. Production budget. D. Rolling budget. E. Manufacturing budget.

Q: Berkley Co.'s sales are 10% for cash and 90% on credit. Credit sales are collected as follows: 30% in the month of sale, 50% in the next month, and 20% in the following month. On December 31, the accounts receivable balance includes $12,000 from November sales and $42,000 from December sales. Assume that total sales for January and February are budgeted to be $50,000 and $100,000, respectively. What are the expected cash receipts for February from current and past sales? A. $80,500. B. $71,500. C. $34,500. D. $61,500. E. $59,500.

Q: Berkley Co.'s sales are 10% cash and 90% on credit. Credit sales are collected as follows: 30% in the month of sale, 50% in the next month, and 20% in the following month. On December 31, the accounts receivable balance includes $12,000 from November sales and $42,000 from December sales. Assume that total sales for January are budgeted to be $50,000. What are the expected cash receipts for January from the current and past sales? A. $18,500. B. $51,500. C. $51,900. D. $55,500. E. $60,500.

Q: Harold's expects its September sales to be 20% higher than its August sales of $150,000. Purchases were $100,000 in August and are expected to be $120,000 in September. All sales are on credit and are collected as follows: 30% in the month of the sale and 70% in the following month. Merchandise purchases are paid as follows: 25% in the month of purchase and 75% in the following month. The beginning cash balance on September 1 is $7,500. The ending cash balance on September 30 would be: A. $31,500. B. $67,500. C. $54,000. D. $61,500. E. $136,500.

Q: A company's history indicates that 20% of its sales are for cash and the rest are on credit. Collections on credit sales are 30% in the month of the sale, 50% in the next month, and 15% the following month. Projected sales for January, February, and March are $60,000, $85,000 and $95,000, respectively. The March expected cash receipts from all current and prior credit sales is: A. $57,000 B. $63,080 C. $64,000 D. $80,750 E. $90,250

Q: A company's history indicates that 20% of its sales are for cash and the rest are on credit. Collections on credit sales are 20% in the month of the sale, 50% in the next month, 25% the following month, and 5% is uncollectible. Projected sales for December, January, and February are $60,000, $85,000 and $95,000, respectively. The February expected cash receipts from all current and prior credit sales is: A. $57,000 B. $61,200 C. $66,400 D. $80,750 E. $90,250

Q: In preparing financial budgets: A. The budgeted balance sheet is usually prepared last. B. The cash budget is usually not prepared. C. The budgeted income statement is usually not prepared. D. The capital expenditures budget is usually prepared last. E. The merchandise purchases budget is the key budget.

Q: Long-term liability data for the budgeted balance sheet is derived from: A. The cash budget and capital expenditures budget. B. The cash budget and sales budget. C. The cash budget and budgeted income statement. D. The sales budget and production budget. E. The asset budget and debt budget.

Q: In preparing a budgeted balance sheet, the amount for Accounts Receivable is primarily determined from: A. The purchases budget. B. The sales budget. C. The capital expenditures budget. D. The budgeted income statement. E. The selling expenses budget.

Q: Lara Company's budget includes the following credit sales for the current year: September, $25,000; October, $36,000; November, $30,000; December, $32,000. Experience has shown that payment for the credit sales is received as follows: 15% in the month of sale, 60% in the first month after sale, 20% in the second month after sale, and 5% is uncollectible. How much cash can Lara Company expect to collect in November as a result of current and past credit sales? A. $19,700. B. $28,500. C. $30,000. D. $31,100. E. $33,900.