Which of the following statements about budgeting is false?

Which of the following statements about budgeting is false?

Budgeting is an aid to planning and control.

Budgets create standards for performance evaluation.

Budgets help coordinate the activities of the entire organization.

Budgeting forces managers to think ahead and formalize future objectives.

The master budget should only be prepared by top management.

Bengal Co. provides the following sales forecast for the next three months:

	July	August	September
Sales units	5,000	5,700	5,560

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 1,250 units. The budgeted production units for July are:

6,250 units.

3,750 units.

6,425 units.

2,500 units.

5,175 units.

July units + 25% of August units - June ending inventory = July production
5,000 units + (5,700 units * .25) - 1,250 units = 5,175 units

Flack Corporation provides the following information for its December budgeting process:

The November 30 inventory was 1,800 units.
Budgeted sales for December are 4,000 units.
Desired December 31 inventory is 2,840 units.

Budgeted purchases are:

5,040 units.

1,240 units.

6,840 units.

4,000 units.

5,800 units.

Budgeted sales units + desired ending inventory - beginning inventory = purchases
4,000 units + 2,840 units - 1,800 units = 5,040 units

Masterson Company's budgeted production calls for 56,000 liters in April and 52,000 liters in May of a key raw material that costs $1.85 per liter. Each month's ending raw materials inventory should equal 30% of the following month's budgeted materials. The January 1 inventory for this material is 16,800 liters. What is the budgeted materials need in liters for April?

71,600 liters.

39,200 liters.

57,600 liters.

56,000 liters.

54,800 liters.

Materials needed + ending inventory requirements - beginning inventory available = materials to be purchased
56,000 + (52,000 * 30%) - 16,800 = 54,800 liters