Principles of Managerial Accounting - Chapter 22 Test

Production and sales estimates for May for Cardinal Co. are as follows: Estimated inventory (units), May 1 19,500 Desired inventory (units), May 31 19,300 Expected sales volume (units): Territory W 6,000 Territory X 7,000 Territory Y 8,000 Unit sales price $20 The number of units expected to be sold in May is

21,000 units

Based on the following production and sales estimates for May for Heron Company, determine the number of units expected to be manufactured in May. Estimated inventory (units), May 1 30,000 Desired inventory (units), May 31 25,000 Expected sales volume (units): South region 20,000 West region 40,000 North region 20,000 Unit sales price $10

75,000 units

Kid's World Industries has projected sales of 67,000 machines for the current year. The estimated January 1 inventory is 6,000 units, and the desired December 31 inventory is 15,000 units. What is the budgeted production (in units) for the year?

76,000 units

Motorcycle Manufacturers, Inc., projected sales of 78,000 machines for the year. The estimated January 1 inventory is 6,500 units, and the desired December 31 inventory is 6,000 units. The budgeted production for the year is

77,500 units

Osprey Cycles, Inc., projected sales of 75,000 bicycles for the year. The estimated January 1 inventory is 5,000 units, and the desired December 31 inventory is 8,000 units. What is the budgeted production (in units) for the year?

78,000

If the expected sales volume for the current period is 8,000 units, the desired ending inventory is 1,400 units, and the beginning inventory is 1,200 units, the number of units set forth in the production budget, representing total production for the current period, is

8,200 units

Sleep Tight, Inc., manufactures bedding sets. The budgeted production is for 52,000 comforters this year. Each comforter requires 1.5 hours to cut and sew the material. The cost of cutting and sewing labor is $12.50 per hour. Determine the direct labor budget for this year.

975,000

Doran Technologies produces a single product. Expected manufacturing costs are as follows: Variable costs Direct materials $4.00 per unit Direct labor $1.20 per unit Manufacturing overhead $0.95 per unit Fixed costs per month Depreciation $6,000 Supervisory salaries 13,500 Other fixed costs 3,850 Estimate manufacturing costs for production levels of 25,000 units, 30,000 units, and 35,000 units per month.

At 25,000 units $177,100 At 30,000 units $207,850 At 35,000 units $238,600

Laurie Inc.'s static budget for 10,000 units of production includes $60,000 for direct materials, $44,000 for direct labor, fixed utilities costs of $5,000, and supervisor salaries of $25,000. A flexible budget for 12,000 units of production would show

direct materials of $72,000, direct labor of $52,800, fixed utilities of $5,000, and supervisor salaries of $25,000

Which of the following budgets allows for adjustments in activity levels?

flexible budget

The process of developing budget estimates by requiring managers to estimate sales, production, and other operating data as though operations were being initiated for the first time is referred to as _____ budgeting.

zero-based

The following budgeted production and sales information is for Flushing Company for the month of December: Product XXX Product ZZZ Estimated beginning inventory 32,000 units 20,000 units Desired ending inventory 34,000 units 17,000 units Region I, anticipated sales 320,000 units 260,000 units Region II, anticipated sales 180,000 units 140,000 units The unit selling price for product XXX is $5 and for product ZZZ is $15. Budgeted sales for the month is

$8,500,000

Production and sales estimates for June for Cardinal Co. are as follows: Estimated inventory (units), June 1 20,000 Desired inventory (units), June 30 19,000 Expected sales volume (units): Territory X 7,000 Territory Y 4,000 Territory Z 5,500 Unit sales price $20 The number of units expected to be manufactured in June is

15,500 units

Mandy Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 98,000 units, and desired ending inventory is 80,000 units. The quantities of direct materials expected to be used for each unit of finished product are as follows: Material A: 0.5 lb. per unit @ $0.60 per pound Material B: 1.0 lb. per unit @ $1.70 per pound Material C: 1.2 lbs. per unit @ $1.00 per pound The dollar amount of Material B used in production during the year is

$1,057,400

Production estimates for August for Jay Company are as follows: Estimated inventory (units), August 1 12,000 Desired inventory (units), August 31 9,000 Expected sales volume (units), August 75,000 For each unit produced, the direct materials requirements are as follows: Line Item Description Value Material A ($5 per lb.) 3.0 lbs. Material B ($18 per lb.) 0.5 lb. The total direct materials purchases (assuming no beginning or ending inventory of material) of Materials A and B required for August production is

$1,080,000 for A; $648,000 for B

Stephanie Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 108,000 units, and desired ending inventory is 90,000 units. The quantities of direct materials expected to be used for each unit of finished product are as follows: Material A 0.5 lb. per unit @ $0.70 per pound Material B 1.0 lb. per unit @ $1.70 per pound Material C 1.2 lbs. per unit @ $1.00 per pound The dollar amount of Material A used in production during the year is

$217,700

For February, sales revenue is $700,000, sales commissions are 5% of sales, the sales manager's salary is $96,000, advertising expenses are $90,000, shipping expenses total 2% of sales, and miscellaneous selling expenses are $2,500 plus 1/2 of 1% of sales. Total selling expenses for the month of February are

$241,000

At the beginning of the period, the Assembly Department budgeted direct labor of $110,000, direct materials of $170,000, and fixed factory overhead of $28,000 for 8,000 hours of production. The department actually completed 10,000 hours of production. The appropriate total budget for the department, assuming it uses flexible budgeting, is

$378,000

Mandy Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 98,000 units, and desired ending inventory is 80,000 units. The quantities of direct materials expected to be used for each unit of finished product are as follows: Material A: 0.5 lb. per unit @ $0.60 per pound Material B: 1.0 lb. per unit @ $1.70 per pound Material C: 1.2 lbs. per unit @ $1.00 per pound The dollar amount of Material C used in production during the year is

$746,400

If the expected sales volume for the current period is 7,000 units, the desired ending inventory is 400 units, and the beginning inventory is 400 units, the number of units set forth in the production budget, representing total production for the current period, is

7,000 units

Production estimates for August for Jay Company are as follows: Estimated inventory (units), August 1 12,000 Desired inventory (units), August 31 9,000 Expected sales volume (units), August 75,000 For each unit produced, the direct materials requirements are as follows: Line Item Description Value Material A ($5 per lb.) 3.0 lbs. Material B ($18 per lb.) 0.5 lb. The number of pounds of Materials A and B required for August production is

216,000 lbs. of A; 36,000 lbs. of B

Production and sales estimates for March for Robin Co. are as follows: Estimated inventory (units), March 118,000 Desired inventory (units), March 31 21,600 Expected sales volume (units): Territory M 7,000 Territory L 8,000 Territory O 9,000 Unit sales price $15 The number of units expected to be manufactured in March is

27,600 units

Rodger's Cabinet Manufacturers uses flexible budgets that are based on the following manufacturing data for the month of July: Line Item Description Amount Direct materials $8 per unit Direct labor $5 per unit Electric power (variable) $0.30 per unit Electric power (fixed) $4,000 per month Supervisor salaries $25,000 per month Property taxes on factory $4,000 per month Straight-line depreciation $2,900 per month Prepare a flexible budget for Rodger's based on production of 10,000,

3000

The following budgeted production and sales information is for Flushing Company for the month of December: Product XXX Product ZZZ Estimated beginning inventory 32,000 units 20,000 units Desired ending inventory 34,000 units 17,000 units Region I, anticipated sales 320,000 units 260,000 units Region II, anticipated sales 180,000 units 140,000 units The unit selling price for product XXX is $5 and for product ZZZ is $15. Budgeted production for Product XXX during the month is

502,000 units