Finance

Q: A local project being analyzed by PERT has 42 activities, 13 of which are on the critical path. If the estimated time along the critical path is 105 days with a project variance of 25, the probability that the project will be completed in 95 days or less is A) -0.4 B) 0.0228 C) 0.3444 D) 0.9772 E) 4.2

Q: An activity on a PERT network has these time estimates: optimistic = 2, most likely = 3, and pessimistic = 8. Its expected time and variance (if it is a critical activity) are A) 3.67; 1 B) 3.67; 6 C) 4.33; 1 D) 4.33; 6 E) none of these

Q: An activity on a PERT network has these time estimates: optimistic = 1, most likely = 2, and pessimistic = 5. Its expected time is A) 2.00 B) 2.33 C) 2.67 D) 8.00 E) none of these

Q: An activity on a PERT network has these time estimates: optimistic = 2, most likely = 5, and pessimistic = 10. Its expected time is A) 5.00 B) 5.33 C) 5.67 D) 17.00 E) none of these

Q: A company's flexible budget for 12,000 units of production showed per unit contribution margin of $3.00 and fixed costs, $20,000. The operating income expected if the company produces and sells 18,000 units is: A.$34,000. B.$10,000. C.$18,667. D.$16,000. E.$24,000.

Q: A project being analyzed by PERT has 60 activities, 13 of which are on the critical path. If the estimated time along the critical path is 214 days with a project variance of 100, the probability that the project will take 224 days or more to complete is A) near zero B) 0.0126 C) 0.1587 D) 0.8413 E) 2.14

Q: Which of the following statements regarding PERT analysis is true? A) Each activity has two estimates of its duration. B) Project variance is the sum of all activity variances. C) Project standard deviation is the sum of all critical activity standard deviations. D) Only critical activities contribute to the project variance. E) None of the above is true.

Q: A company's flexible budget for 12,000 units of production showed total contribution margin of $24,000 and fixed costs, $16,000. The operating income expected if the company produces and sells 15,000 units is: A.$34,000. B.$10,000. C.$18,667. D.$8,000. E.$14,000.

Q: In a PERT network, non-critical activities that have little slack need to be monitored closely A) because PERT treats all activities as equally important B) because near-critical paths could become critical paths with small delays in these activities C) because slack is undesirable and needs to be eliminated D) because they are causing the entire project to be delayed E) because they have a high risk of not being completed

Q: A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs, $18,000; and fixed costs, $16,000. The operating income expected if the company produces and sells 16,000 units is: A.$ 2,667. B.$14,000. C.$18,667. D.$24,000. E.$35,000.

Q: The Beta distribution is used in project management to A) determine which activity should be crashed B) calculate the probability that a project will be completed within its budget C) calculate expected activity times D) calculate slack for activities on the critical path E) none of the above

Q: A flexible budget may be prepared: A.Before the operating period only. B.After the operating period only. C.During the operating period only. D.At any time in the planning period. E.Only when the company encounters excessive costs.

Q: The Beta distribution is used in project management to A) calculate slack on activities not on the critical path B) calculate the probability that a project will be completed within its budget C) calculate pessimistic and optimistic activity times D) determine which activity should be crashed E) none of the above

Q: Which of the following statements regarding PERT times is true? A) The expected time is an estimate of the time an activity will require if everything goes as planned. B) The optimistic time estimate is an estimate of the maximum time an activity will require. C) The expected time estimate is calculated as t = (a + 4m + b)/6. D) The pessimistic time estimate is an estimate of the minimum time an activity will require. E) The most likely time estimate is an estimate of the maximum time an activity will require.

Q: Sales variance analysis is used by managers for: A.Planning purposes only. B.Budgeting purposes only. C.Control purposes only. D.Planning and control purposes. E.Planning and budgeting purposes.

Q: Which of the following statements regarding PERT times is true? A) The optimistic time estimate is an estimate of the minimum time an activity will require. B) The optimistic time estimate is an estimate of the maximum time an activity will require. C) The probable time estimate is calculated as t = (a + 4m + b). D) Pessimistic time estimate is an estimate of the minimum time an activity will require. E) Most likely time estimate is an estimate of the maximum time an activity will require.

Q: The critical path for the network activities shown below is __________ with duration __________. Activity Duration Immediate Predecessors A 10 --- B 8 --- C 2 A D 4 A E 5 B,C, D A) A-C; 12 B) A-D-E; 19 C) B-E; 13 D) A-B-C-D-E; 29 E) none of the above

Q: A flexible budget performance report compares the differences between: A.Actual performance and budgeted performance based on actual sales volume. B.Actual performance over several periods. C.Budgeted performance over several periods. D.Actual performance and budgeted performance based on budgeted sales volume. E.Actual performance and standard costs at the budgeted sales volume.

Q: Identify the situation below that will result in a favorable variance. A.Actual revenue is higher than budgeted revenue. B.Actual revenue is lower than budgeted revenue. C.Actual income is lower than expected income. D.Actual costs are higher than budgeted costs. E.Actual expenses are higher than budgeted expenses.

Q: The expected activity time in PERT analysis is calculated as A) the simple average of the optimistic, pessimistic, and most likely times B) the weighted average of a, m, and b, with m weighted 4 times as heavily as a and b C) the sum of the optimistic, pessimistic, and most likely times D) the sum of the optimistic, pessimistic, and most likely times, divided by six E) the sum of the activity variances, divided by six

Q: The __________ distribution is used by PERT analysis to calculate expected activity times and variances. A) Normal B) Beta C) Alpha D) Gaussian E) Binomial

Q: The critical path for the network activities shown below is __________ with duration __________. Activity Duration Immediate Predecessors A 2 -- B 4 -- C 6 A,B D 1 A,B E 2 B,C,D A) A-D-E; 5 B) B-E; 6 C) B-D-E; 7 D) A-C-E; 10 E) B-C-E; 12

Q: The critical path for the network activities shown below is __________ with duration __________. Activity Duration Immediate Predecessors A 4 --- B 2 A C 7 -- D 4 A E 5 B,C,D A) A-B-D; 10 B) A-B-E; 11 C) C-E; 12 D) A-D-E; 13 E) A-B-C-D-E; 22

Q: A budget based on several different levels of activity, often including both a best-case and worst-case scenario, is called a: A.Rolling budget. B.Production budget. C.Flexible budget. D.Merchandise purchases budget. E.Fixed budget.

Q: The time an activity will take assuming very unfavorable conditions is A) the optimistic time B) the pessimistic time C) the activity variance D) the minimum time E) exactly twice as long as the expected time

Q: In this type of control system, the master budget is based on a single prediction for sales volume, and the budgeted amount for each cost essentially assumes that a specific amount of sales will occur: A.Sales budget. B.Standard budget. C.Flexible budget. D.Fixed budget. E.Variable budget.

Q: Which of the following statements concerning CPM activities is false? A) The early finish of an activity is the early start of that activity plus its duration. B) The late finish is the earliest of the late start times of all successor activities. C) The late start of an activity is its late finish less its duration. D) The late finish of an activity is the earliest late start of all preceding activities. E) The early start of an activity is the latest early finish of all preceding activities.

Q: Activity R on a CPM network has predecessors M and N, and has successor S. R has duration 5. N's late finish is 18, while M's is 20. S's late start is 14. Which of the following is definitely true? A) R is critical and has zero slack. B) R has no slack but is not critical. C) The set of given times cannot all be possible. D) N is a critical activity. E) S is a critical activity.

Q: The ___________________________ shows the budgeted costs for factory overhead that will be needed to complete the estimated production for the period, often separated into variable and fixed costs.

Q: Which of the following statements regarding CPM networks is true? A) There can be multiple critical paths on the same project, all with different durations. B) The early finish of an activity is the latest early start of all preceding activities. C) The late start of an activity is its late finish plus its duration. D) If a specific project has multiple critical paths, all of them will have the same duration. E) All of the above are false.

Q: The ___________________________ , prepared by manufacturing firms, shows the number of units to be produced in a period based on the unit sales projected in the sales budget, along with inventory considerations.

Q: Activity D on a CPM network has predecessors B and C, and has successor F. D has duration 6. B's earliest finish is 18, while C's is 20. F's late start is 26. Which of the following is definitely true? A) B is a critical activity. B) C is completed before B. C) D has no slack but is not critical. D) D is critical and has zero slack. E) F is critical and has zero slack.

Q: A simple CPM network has five activities, A, B, C, D, and E. A is an immediate predecessor of C and of D. B is also an immediate predecessor of C and of D. C and D are both immediate predecessors of E. A) There are two paths in this network. B) There are four paths in this network. C) There are five paths in this network. D) There are 25 paths through this network. E) None of these statements is true.

Q: A simple CPM network has three activities, D, E, and F. D is an immediate predecessor of E and of F. E is an immediate predecessor of F. The activity durations are D=4, E=3, F=8. A) The critical path is D-E-F, duration 15. B) The critical path is D-F, duration 12. C) Slack at D is 3 units. D) Slack at E is 3 units. E) Both A and C are true.

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: A simple CPM network has three activities, A, B, and C. A is an immediate predecessor of B and of C. B is an immediate predecessor of C. The activity durations are A=4, B=3, C=8. A) The critical path is A-B-C, duration 15. B) The critical path is A-C, duration 12. C) The critical path is A-B-C, duration 13.5 D) The critical path cannot be determined without knowing PERT expected activity times. E) The network has no critical path.

Q: Which of the following statements regarding CPM is true? A) The critical path is the shortest of all paths through the network. B) The critical path is that set of activities that has positive slack. C) Some networks have no critical path. D) All activities on the critical path have their LS equal to the maximum EF of all immediate predecessors. E) All of the above are false.

Q: Which of the following statements regarding critical paths is true? A) The shortest of all paths through the network is the critical path. B) Some activities on the critical path may have slack. C) Every network has only one critical path. D) On a specific project, there can be multiple critical paths, all with exactly the same duration. E) The duration of the critical path is the average duration of all paths in the project network.

Q: The difference between AON and AOA networks is that A) AOA networks sometimes require dummy activities B) nodes consume no resources or time in AOA networks C) both are acceptable in practice, however Microsoft Project uses AON D) in AON nodes designate activities, in AOA arrows designate activities E) All of the above are true.

Q: Guidance for the budget process is usually supplied by a _____________________ of department heads and other executives responsible for seeing that budgeted amounts are realistic and coordinated.

Q: A project manager is interested in crashing a project with variable activity times. Which of the following tools should he/she employ? A) PERT B) CPM C) Gantt Chart D) either PERT or CPM E) PERT, CPM, or a Gantt chart are fine

Q: The main difference between PERT and CPM is that A) PERT is more accurate than CPM B) PERT assumes that activity durations are known C) PERT ignores activity costs D) CPM assumes that activity durations can vary E) None of the above are true

Q: Use the following information to prepare a budgeted balance sheet for Grover 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; total budgeted cash receipts are $1,660,000; total budgeted cash disbursements are $1,580,000. c. Budgeted sales for June are $1,700,000. Collections are 40% in the month of sale and 60% in the month following. d. The projected inventory balance is 10% of the following month's sales. Sales for July are projected to be $1,750,000. e. Budgeted purchases for June are $900,000 to be paid 80% in the month of purchase and 20% in the month following. f. The equipment account balance is $1,400,000 on May 31. No equipment purchases or disposals were made during June. On May 31, the accumulated depreciation 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 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. No additional common stock was issued and no dividends were paid during June.

Q: Which of the following statements regarding Gantt charts is true? A) Gantt charts give a timeline and precedence relationships for each activity of a project. B) Gantt charts use the four standard spines of Methods, Materials, Manpower, and Machinery. C) Gantt charts are visual devices that show the duration of activities in a project. D) Gantt charts are expensive. E) All of the above are true.

Q: Use the following information to prepare a budgeted income statement for Stellar Company for the month of June. a. Beginning cash balance on June 1 is $52,000. b. Sales amounts are: April (actual), $1,450,000, May (actual), $1,600,000, and June (budgeted), $1,700,000. c. Cost of goods sold is 53% of sales. 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. The income tax rate applicable to the company is 30%.

Q: A combination of effective Gantt chart use and other tactics allowed Delta to cut the average time for a plane layover by what % of the original 60 minute duration? A) 33%, to 40 minutes B) 50%, to 30 minutes C) 20%, to 48 minutes D) 25%, to 45 minutes E) 40%, to 36 minutes

Q: Use the following information to prepare the June cash budget for Springer 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 are expected to be $1,625,000. c. Cash payments for direct materials and direct labor are expected to be $246,500 and 573,100, respectively. d. Budgeted cash payments for variable overhead is $340,000. e. Budgeted depreciation, the only fixed overhead estimated for June: $24,000. f. Cash selling and administrative expenses budgeted for June are $282,000. g. Bank loan interest due in June: $8,000. i. Loan payment of $50,000 should be made if the preliminary cash balance is greater than $200,000.

Q: Match the following steps in Microsoft's development of Windows 7 to their respective WBS level. Step Level Develop Windows 7 OS ? System Testing ? Compatible with Windows XP ? Develop GUI's ? Module Testing ? A) Level 1, Level 2, Level 4, Level 3, Level 3 B) Level 1, Level 2, Level 3, Level 4, Level 5 C) Level 0, Level 1, Level 2, Level 3, Level 4 D) Level 0, Level 2, Level 2, Level 3, Level 3 E) None of the above patterns is correct.

Q: Snap, Inc., provides the following data for the next four months: April May June Budgeted production units 442 570 544 Ending Raw Materials Inventory "u00a6"u00a6. 663 lbs. Ending Finished Goods Inventory "u00a6... 174 Units Desired Ending Inventory: Raw Materials = 30% of next month's production needs 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: WBS stands for which of the following project management tools? A) Work Break Schedule B) Work Breakdown Status C) Work Breakdown Schedule D) Work Breakdown Structure E) None of the above

Q: Addams, 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 "u00a6"u00a6 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 lbs. How many pounds of raw materials should be purchased in April?

Q: A project organization that becomes permanent is often referred to as a __________. A) fixed project organization B) matrix organization C) normal organization D) standard organization E) none of the above

Q: The production budget for Greski Company revealed the following production volume for the months of July"September. Each unit produced requires 2.5 hours of direct labor. The direct labor rate is predicted to be $16 per hour in all months. Prepare a direct labor budget for Greski Company for July"September. July Aug Sept Units to be produced 620 680 540

Q: The project organization works best when which of the following conditions are satisfied? I. Work can be defined with a specific goal and deadline. II. The job is typical and familiar to the existing organization. III. The work contains interrelated tasks requiring specialized skills IV. The project is temporary but unimportant to long-term organizational success V. The project cuts across organizational lines. A) I,II,III,IV,V B) None of the above conditions need to be satisfied C) I,III,V D) I,II,III,V E) I,III,IV,V

Q: Ethical issues that may arise in projects large and small include A) gifts from contractors B) exaggerated expense reports C) compromised safety or health standards to save time or reduce costs D) pressure to mask delays with false status reports E) all of the above

Q: A code of ethics especially for project managers A) has been established by the Project Management Institute B) has been formulated by the Federal government C) has been formulated by the World Trade Organization D) is inappropriate, since everyone should use the same guidance on ethical issues E) does not exist at this time

Q: Diego, Inc., sells two products, Baubles and Charms. The sales forecast in units for the first quarter of the coming year is: Baubles Charms January"u00a6.. 20,000 36,000 February"u00a6 28,000 60,000 March"u00a6"u00a6 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 Baubles and Charms, respectively. Determine the company's cash receipts for March from its current and past sales.

Q: Which of the following statements regarding project management is false? A) Gantt charts give a timeline for each of a projects activities, but they do not adequately illustrate the interrelationships between the activities and the resources. B) A project organization works best for a project that is temporary but critical to the organization. C) A project organization works well when the work contains simple, independent tasks. D) Gantt charts and PERT/CPM are never used together. E) All of the above are false.

Q: A project organization A) is effective for companies with multiple large projects B) is appropriate only in construction firms C) often fails when the project cuts across organizational lines D) is formed to ensure that programs (projects) get proper management and attention E) A and D are both true

Q: The following information is available for Jergenson 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 $21,000 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 $77,000 with accumulated depreciation of $28,000, common stock of $25,000 and 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: Which of the following is not one of the three phases of project management? A) planning B) scheduling C) controlling D) All of the above are project management phases. E) Both A and C are not project management phases.

Q: Widmer Corp. requires a minimum $10,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). If the ending cash balance exceeds the minimum, the excess will be applied to repaying any outstanding loan balance. The cash balance on July 1 is $10,400. 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 August and September: July August September Sales"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6.. $24,000 $32,000 $36,000 Purchases"u00a6"u00a6"u00a6"u00a6. 14,400 $19,200 $21,600 Payments for purchases"u00a6"u00a6"u00a6.. One month after purchase Selling expenses"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6 15% of sales, paid in the month of sale Administrative expenses"u00a6"u00a6"u00a6.. 10% of sales, paid in the month of sale Rent expense"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6"u00a6. $2,400 per month Equipment depreciation"u00a6"u00a6"u00a6"u00a6 $1,300 per month

Q: The phases of project management are A) planning, scheduling, and controlling B) planning, programming, and budgeting C) planning, organizing, staffing, leading, and controlling D) different for manufacturing projects than for service projects E) GANTT, CPM, and PERT

Q: Lafayette 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. Calculatethe following. August September October November Sales "u00a6"u00a6"u00a6.. $500,000 $525,000 $535,000 $550,000 October November Receipts from cash sales "u00a6"u00a6"u00a6"u00a6"u00a6... (1) (6) Collections from August credit sales "u00a6 (2) (7) Collections from September credit sales (3) (8) Collections from October credit sales ... (4) (9) Total cash collections during the month (5) (10)

Q: Which of the following projects were completed by Bechtel? A) Hoover Dam B) Boston Central Artery/Tunnel C) Rebuilding Kuwait after Iraq's invasion in 1990 D) Rebuilding Iraq after the U.S. invasion, starting in 2003 E) All of the above were Bechtel projects

Q: The Ewing Company budgeted sales for January, February, and March of $96,000, $88,000, and $72,000, respectively. Seventy percent of sales are on credit. The company collects 60% of its credit sales in the month following sale, and 40% in the second month following sale. What are Ewing's expected cash receipts for March related to all current and past sales?

Q: Which of the following statements about Bechtel is true? A) Even though Bechtel is over 100 years old, the Kuwaiti oil fields was its first "project." B) Bechtel is the world's premier manager of massive construction and engineering projects. C) Bechtel's competitive advantage is supply-chain management. D) While its projects are worldwide, its network of suppliers is largely in the U.S. E) All of the above are true.

Q: Which of the following statements regarding Bechtel is true? A) Its competitive advantage is project management. B) Bechtel was the construction contractor for the Hoover Dam. C) While helping to rebuild Iraq, Bechtel's crews had to travel under armed escort. D) Bechtel's procurement program is global in nature. E) All of the above are true.

Q: Groundworks 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 Groundworks Company expect to collect in November from all current and past credit sales?

Q: In project management, crashing an activity must consider the impact on all paths in the network.

Q: Stanley 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. Stanley 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: Shortening the project's duration by deleting unnecessary activities is called "project crashing."

Q: Oxford, 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 "u00a6"u00a6"u00a6.. 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 the ending cash balance exceeds the minimum, the excess will be applied to repaying any outstanding loan balance. 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 Schedule of cash receipts Merchandise purchases budget Schedule of cash disbursements for purchases of merchandise Schedule of cash disbursements for selling and administrative expenses (combined) Cash budget, including information on the loan balance Budgeted income statement for the quarter

Q: In PERT analysis, the identification of the critical path can be incorrect if a noncritical activity takes substantially more than its expected time.

Q: Hammerly 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 "u00a6"u00a6"u00a6"u00a6"u00a6"u00a6. 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 the ending cash balance exceeds the minimum, the excess will be applied to repaying any outstanding loan balance. 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 Schedule of cash receipts Merchandise purchases budget Schedule of cash disbursements for merchandise purchases Schedule of cash disbursements for selling and administrative expenses (combined) Cash budget, including information on the loan balance Budgeted income statement for the quarter

Q: The standard deviation of project duration is the average of the standard deviation of all activities on the critical path.

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