ACC CH. 8 Quiz

Sioux Corporation is estimating the following sales for the first four months of next year: January $210,000 February $280,000 March $340,000 April $370,000 Sales are normally collected 60% in the month of sale and 40% in the month following the sale. Based on this information, how much cash should Sioux expect to collect during the month of April?

$358,000 April sales collected in April($370,000x60%) =$222,000 March sales collected in April($340,000x40%) =$136,000 Total cash collection in April =$358,000

Yerkey Corporation makes one product and has provided the following information to help prepare the master budget: Budgeted unit sales, February 10,700 units Variable selling and administrative expense $2.00 per unit sold Fixed selling and administrative expense $60,000 per month The estimated selling and administrative expense for February is closest to:

$81,400 Budgeted unit sales =10,700 Variable selling and administrative expense per unit =$2.00 Total variable selling and administrative expense =$21,400(10,700x$2) Fixed selling and administrative expenses =60,000 Total selling and administrative expenses =$81,400(21,400+60,000)

Jannusch Corporation makes one product. Budgeted unit sales for July, August, September, and October are 10,000, 11,600, 13,300, and 12,700 units, respectively. The ending finished goods inventory should equal 20% of the following month's sales. The budgeted required production for August is closest to:

11,940 units Budgeted sales in unit =11,600 Add desired ending inventory(September sales of 13,300 units x 20% = 2,660 units) =2,660 Total needs =14,260 Less beginning inventory(August sales of 11,600 units x 20% = 2,320units) =2,320 units Required production =11,940 units

Garry Corporation's most recent production budget indicates the following required production: Required productions(unit) October 210,000 November 175,000 December 110,000 Each unit of finished product requires 5 pounds of raw materials. The company maintains raw materials inventory equal to 25% of the next month's expected production needs. How many pounds of raw material should Garry plan on purchasing for the month of November?

793,750 November: Required production in units =175,000 Raw materials required per unit =5 Raw materials needed to meet the production =875,000(175,000x5) Add desired ending raw materials inventory(110,000 units x 5 pounds per unit x 25%) =137,500 Total raw materials inventory =1,012,500(875,000+137,500) Less beginning raw materials inventory(175,000 units x 5 pounds per unit x 25%) =218,750 Raw materials to be purchased =793,750(1,012,500-218,750)

The usual starting point for a master budget is:

the sales forecast or sales budget