Chapter 8 Quiz

Bustillo Inc. is working on its cash budget for March. The budgeted beginning cash balance is $46,000. Budgeted cash receipts total $130,000 and budgeted cash disbursements total $125,000. The desired ending cash balance is $62,000. To attain its desired ending cash balance for March, the company needs to borrow:

$11,000

Davis Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of the year. The budgeted variable manufacturing overhead rate is $1.70 per direct labor hour; the budgeted fixed manufacturing overhead is $116,000 per month, of which $30,000 factory depreciation. If the budgeted direct labor time for October is 8,000 hours, then the total budgeted manufacturing overhead for October is:

$129,600

Smith Corporation makes and sells a single product called a Pod. Each Pod requires 1.4 direct labor hours at $9.60 per direct labor hour. The direct labor workforce is fully adjusted each month to the required workload. Smith Corporation is preparing a Direct Labor Budget for the second quarter of the year: The budgeted direct labor cost per Pod is closest to:

$13.44

Um Corporation has provided the following information concerning its raw materials purchases. The budgeted cost of raw materials purchases in November is $286,032. The company pays for 40% of its raw materials purchases in the month of purchase and 60% in the following month. The budgeted accounts payable balance at the end of November is closest to:

$171,619

The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor hours. The direct labor budget indicates that 9,200 direct labor hours will be required in February. The variable overhead rate is $8.80 per direct labor hour. The company's budgeted fixed manufacturing overhead is $120,520 per month, which includes depreciation of $18,270. All other fixed manufacturing overhead costs represents current cash flows. The February cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

$183,210

Smith Corporation makes and sells a single product called a Pod. Each Pod requires 2.9 direct labor-hours at $11.10 per direct labor hours. The direct labor workforce is fully adjusted each month to the required workload. Smith Corporation is preparing a Direct Labor Budget for the second quarter of the year. In June the company has budgeted to produce 23,500 Pods. Budgeted direct labor costs incurred in June would be:

$756,465

Bux Corporation produces and sells one product. In November it expects to sell 10,600 units of this product. The company's variable selling and administrative expense is $3.70 per unit sold and its fixed selling and administrative expense is $50,000 per month. The estimated selling and administrative expense for November is closest to:

$89,220

Sill Corporation makes one product. Budgeted unit sales for January, February, March and April are 9,900, 11,400, 11,900, and 13,400 units, respectively. The ending finished goods inventory equals 20% of the following month's sales. The ending raw materials inventory equals 40% of the following month's raw materials production needs. Each unit of finished good requires 5 pounds of raw materials. If 61,000 pounds of raw materials are required for production in March, then the budgeted raw material purchases for February is closest to:

58,900 pounds

Which of the following statements is NOT correct concerning the Cash Budget?

It is not necessary to prepare any other budgets before preparing the Cash Budget

T/F: A benefit from budgeting is that it forces managers to think about and plan for the future

True

T/F: The manufacturing overhead budget lists all costs of production other than direct materials and direct labor

True

T/F: The production budget is typically prepared before the direct materials budget

True