Exam # 3 Study Guide Question and
answers already passed 2025
Chapter 20:
A July sales forecast projects that 7,600 units are going to be sold at a price of
$12.10 per unit. Management forecasts 15% growth in sales each month.
Total July sales are anticipated to be:
A. $123,420
B. $91,960
C. $60,500
D. $96,679
E. $87,241 - correct answer ✔B. $91,960
7,600 × $12.10 = $91,960
Bengal Co. provides the following unit sales forecast for the next three
months:
The company wants to end each month with ending finished goods inventory
equal to 25% of the next month's sales. Finished goods inventory on June 30
is 1,125 units. The budgeted production units for July are:
,July- 4,500
August- 5,200
September- 5,060
A. 6,625
B. 3,375
C. 5,800
D. 2,250
E. 4,675 - correct answer ✔E. 4,675
July units + 25% of August units − June ending inventory = July
production4,500 units + (5,200 units × .25) − 1,125 units = 4,675 units
Cahuilla Corporation predicts the following sales in units for the coming four
months:
April- 420
May- 460
June- 480
July- 420
A. 398
B. 276
C. 652
D. 460
E. 468 - correct answer ✔E. 468
, for sales- 460 + for ending inventory (40%x 480) - beginning inventory (40%x
460)
=468
A formal statement of future plans, usually expressed in monetary terms, is a:
A. variance report
B. position statement
C. budget
D. prospectus
E. variance analysis - correct answer ✔C. budget
Operating budgets include all the following budgets except the:
A. sales budget
B. selling expense report
C. cash budget
D. production budget
E. general and administrative budget - correct answer ✔C. cash budget
The usual starting point for preparing a master budget is forecasting or
estimating:
A. expenditures
B. sales
C. production
D. income
answers already passed 2025
Chapter 20:
A July sales forecast projects that 7,600 units are going to be sold at a price of
$12.10 per unit. Management forecasts 15% growth in sales each month.
Total July sales are anticipated to be:
A. $123,420
B. $91,960
C. $60,500
D. $96,679
E. $87,241 - correct answer ✔B. $91,960
7,600 × $12.10 = $91,960
Bengal Co. provides the following unit sales forecast for the next three
months:
The company wants to end each month with ending finished goods inventory
equal to 25% of the next month's sales. Finished goods inventory on June 30
is 1,125 units. The budgeted production units for July are:
,July- 4,500
August- 5,200
September- 5,060
A. 6,625
B. 3,375
C. 5,800
D. 2,250
E. 4,675 - correct answer ✔E. 4,675
July units + 25% of August units − June ending inventory = July
production4,500 units + (5,200 units × .25) − 1,125 units = 4,675 units
Cahuilla Corporation predicts the following sales in units for the coming four
months:
April- 420
May- 460
June- 480
July- 420
A. 398
B. 276
C. 652
D. 460
E. 468 - correct answer ✔E. 468
, for sales- 460 + for ending inventory (40%x 480) - beginning inventory (40%x
460)
=468
A formal statement of future plans, usually expressed in monetary terms, is a:
A. variance report
B. position statement
C. budget
D. prospectus
E. variance analysis - correct answer ✔C. budget
Operating budgets include all the following budgets except the:
A. sales budget
B. selling expense report
C. cash budget
D. production budget
E. general and administrative budget - correct answer ✔C. cash budget
The usual starting point for preparing a master budget is forecasting or
estimating:
A. expenditures
B. sales
C. production
D. income
