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CHAPTER 23
OPERATIONAL BUDGETING
OVERVIEW OF BRIEF EXERCISES, EXERCISES, PROBLEMS, AND CRITICAL
THINKING CASES
Brief
Exercises
B. Ex. 23.1
B. Ex. 23.2
B. Ex. 23.3
B. Ex. 23.4
B. Ex. 23.5

Topic
Budgeting philosophies
Cash flow at Body Builders
Production budget
Estimating direct materials inventory
Benefits of budgeting

Learning
Objectives
23-3
23-1, 23-5
23-4
23-4
23-2

B. Ex. 23.6
B. Ex. 23.7
B. Ex. 23.8
B. Ex. 23.9

Elements of the budget
Flexible budgets
Operating expense budget
Cost of budgeting systems

B. Ex. 23.10

Evaluating managers with flexible budgets

Exercises
23.1
23.2
23.3
23.4
23.5
23.6
23.7
23.8
23.9
23.10
23.11
23.12

Topic
Budgeting purchases and cash payments
Budgeting labor costs
Production budgets
Production and …show more content…

Prepare a cash budget for one month.

50 Strong

23.4 A,B

Fromer Corporation/Peter Corporation
Analyze collection patterns for accounts receivable and accounts payable. Assess the company’s ability to generate adequate cash flow to service additional debt.

40 Strong

23.5 A,B

Rizzo’s/Snyder's
Analyze a budgeted income statement and a cash budget, and determine why income recognition differs from cash flow.

30 Strong

23.6 A,B

Marley Wholesale/Marlow Industries
Prepare a monthly cash budget for three months in support of a loan application. Determine whether a scheduled loan repayment can be met at the end of the period.

60 Strong

23.7 A,B

Snells/Eight Flags
Prepare a statement comparing actual results with a flexible budget and comment on the company’s performance.

50 Medium

23.8 A,B

Braemar Saddlery/XL Industries
An excellent problem for demonstrating the importance of flexible budgeting. Due to an increase in production, the production department exceeds its budget by large amounts. The student is asked to prepare a flexible budget showing that the company actually did very well in controlling costs.

45 Medium

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Critical Thinking Cases
Budgeting in a Nutshell
23.1
A short budgeting case that shows the interrelationships among budgeted financial statements. but more importantly, it

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