Chapter 5

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Petrini Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $110. Budgeted unit sales for January, February, March, and April are 7,500, 10,600, 12,000, and 11,700 units, respectively. All sales are on credit. b. Regarding credit sales, 30% are collected in the month of the sale and 70% in the following month. c. The ending finished goods inventory equals 30% of the following month's sales. d. The ending raw materials inventory equals 10% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $4.00 per pound. e. Regarding raw materials purchases, 40% are paid for in the month of purchase and 60% in the following month. f. The direct labor wage rate is $23.00 per hour. Each unit of finished goods requires 2.6 direct labor-hours. g. Manufacturing overhead is entirely variable and is $8.00 per direct labor-hour. h. The variable selling and administrative expense per unit sold is $1.70. The fixed selling and administrative expense per month is $70,000. The e

A) $1,066,360

Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 2.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows: August 22,600 units September 21,300 units October 22,700 units November 23,900 units December 23,600 units The company wants to maintain monthly ending inventories of Jurislon equal to 20% of the following month's production needs. On July 31, this requirement was not met since only 10,800 kilograms of Jurislon were on hand. The cost of Jurislon is $18.00 per kilogram. The company wants to prepare a Direct Materials Purchase Budget for the next five months. The total cost of Jurislon to be purchased in August is: A) $1,839,600 B) $1,014,300 C) $1,208,700 D) $1,017,000

A) $1,839,600

Litzinger Corporation makes one product. The ending raw materials inventory should equal 20% of the following month's raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $1.00 per pound. The company estimates that it will need 53,720 pounds of raw material to satisfy production needs in June. The raw materials inventory balance at the end of May should be closest to: A) $10,744 B) $7,984 C) $50,664 D) $42,680

A) $10,744

A) $11,620

The BRS Corporation makes collections on sales according to the following schedule: 25% in month of sale 71% in month following sale 4% in second month following sale The following sales have been budgeted: Sales April $ 180,000 May $ 110,000 June $ 100,000 Budgeted cash collections in June would be: A) $110,300 B) $100,000 C) $100,720 D) $103,100

A) $110,300

Michard Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $125. Budgeted unit sales for April, May, June, and July are 7,600, 10,500, 13,800, and 12,900 units, respectively. All sales are on credit. b. Regarding credit sales, 20% are collected in the month of the sale and 80% in the following month. c. The ending finished goods inventory equals 20% of the following month's sales. d. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.00 per pound. e. Regarding raw materials purchases, 30% are paid for in the month of purchase and 70% in the following month. f. The direct labor wage rate is $25.00 per hour. Each unit of finished goods requires 3.0 direct labor-hours. g. The variable selling and administrative expense per unit sold is $3.40. The fixed selling and administrative expense per month is $80,000. The estimated selling and administrative expense for May is closest to: A) $115,700 B) $80,0

A) $115,700

The Puyer Corporation makes and sells only one product called a Deb. The company is in the process of preparing its Selling and Administrative Expense Budget for next year. The following budget data are available: Monthly Fixed Cost Variable Cost Per Deb Sold Sales commissions $ 0.90 Shipping $ 1.40 Advertising $ 50,000 $ 0.20 Executive salaries $ 60,000 Depreciation on office equipment $ 20,000 Other $ 40,000 All of these expenses (except depreciation) are paid in cash in the month they are incurred. If the company has budgeted to sell 17,000 Debs in March, then the average budgeted selling and administrative expenses per unit sold for March is closest to: A) $12.50 per unit B) $2.50 per unit C) $10.00 per unit D) $17.00 per unit

A) $12.50 per unit

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 is factory depreciation. If the budgeted direct labor time for October is 8,000 hours, then the total budgeted manufacturing overhead for October is: A) $129,600 B) $43,600 C) $99,600 D) $86,000

A) $129,600

Bries Corporation is preparing its cash budget for January. The budgeted beginning cash balance is $19,300. Budgeted cash receipts total $189,500 and budgeted cash disbursements total $190,600. The desired ending cash balance is $31,300. To attain its desired ending cash balance for January, the company should borrow: A) $13,100 B) $0 C) $31,300 D) $49,500

A) $13,100

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: A) $13.44 B) $9.60 C) $7.38 D) $11.00

A) $13.44

Bentsen Corporation makes one product. July August September October Budgeted unit sales 8,500 9,000 13,900 11,100 The ending finished goods inventory equals 40% of the following month's sales. The ending raw materials inventory equals 10% of the following month's raw materials production needs. Each unit of finished goods requires 6 pounds of raw materials. The raw materials cost $2.00 per pound. If 76,680 pounds of raw materials are required for production in September, then the budgeted cost of raw material purchases for August is closest to: A) $133,704 B) $131,520 C) $160,008 D) $146,856

A) $133,704

The BRS Corporation makes collections on sales according to the following schedule: 30% in month of sale 60% in month following sale 10% in second month following sale The following sales have been budgeted: Sales April $ 140,000 May $ 130,000 June $ 150,000 Budgeted cash collections in June would be: A) $137,000 B) $85,000 C) $45,000 D) $123,000

A) $137,000

The Charade Corporation is preparing its Manufacturing Overhead budget for the fourth quarter of the year. The budgeted variable manufacturing overhead is $5.00 per direct labor- hour; the budgeted fixed manufacturing overhead is $75,000 per month, of which $15,000 is factory depreciation. If the budgeted direct labor time for December is 8,000 hours, then average budgeted manufacturing overhead per direct labor-hour is closest to: A) $14.38 per direct labor-hour B) $9.38 per direct labor-hour C) $12.50 per direct labor-hour D) $16.25 per direct labor-hour

A) $14.38 per direct labor-hour

Sedita Incorporated is working on its cash budget for July. The budgeted beginning cash balance is $14,000. Budgeted cash receipts total $183,000 and budgeted cash disbursements total $182,000. The desired ending cash balance is $33,000. The excess (deficiency) of cash available over disbursements for July will be: A) $15,000 B) $13,000 C) $1,000 D) $197,000

A) $15,000

Bries Corporation is preparing its cash budget for January. The budgeted beginning cash balance is $18,000. Budgeted cash receipts total $183,000 and budgeted cash disbursements total $188,000. The desired ending cash balance is $30,000. To attain its desired ending cash balance for January, the company should borrow: A) $17,000 B) $0 C) $30,000 D) $43,000

A) $17,000

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $303,000 for November, $323,000 for December, and $223,000 for January. Collections are expected to be 70% in the month of sale and 30% in the month following the sale. The cost of goods sold is 75% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 80% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $22,400. Monthly depreciation is $27,500. Ignore taxes. Balance Sheet October 31 Assets Cash $ 33,000 Accounts receivable 83,500 Merchandise inventory 181,800 Property, plant and equipment, net of $624,000 accumulated depreciation 918,000 Total assets $ 1,216,300 Liabilities and Stockholders' Equity Accounts payable $ 252,000 Common stock 753,000 Retained earnings 211,300 Total liabilities and stockholders' equity $ 1,216,300 Accounts payable at the end of December would be: A) $182,250 B) $242,250 C) $133,800 D) $48,450

A) $182,250

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January. Collections are expected to be 65% in the month of sale and 35% in the month following the sale. The cost of goods sold is 80% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $21,100. Monthly depreciation is $21,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 25,000 Accounts receivable 77,000 Merchandise inventory 162,400 Property, plant and equipment, net of $624,000 accumulated depreciation 1,026,000 Total assets $ 1,290,400 Liabilities and Stockholders' Equity Accounts payable $ 239,000 Common stock 740,000 Retained earnings 311,400 Total liabilities and stockholders' equity $ 1,290,400 The net income for December would be: A) $19,900 B) $38,700 C) $40,900 D) $13,700

A) $19,900

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January. Collections are expected to be 65% in the month of sale and 35% in the month following the sale. The cost of goods sold is 80% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $21,100. Monthly depreciation is $21,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 25,000 Accounts receivable 77,000 Merchandise inventory 162,400 Property, plant and equipment, net of $624,000 accumulated depreciation 1,026,000 Total assets $ 1,290,400 Liabilities and Stockholders' Equity Accounts payable $ 239,000 Common stock 740,000 Retained earnings 311,400 Total liabilities and stockholders' equity $ 1,290,400 Accounts payable at the end of December would be: A) $192,000 B) $248,000 C) $117,600 D) $74,400

A) $192,000

A) $21,300

A) $23,820

Carver Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow: Sales are budgeted at $350,000 for November, $320,000 for December, and $300,000 for January. Collections are expected to be 90% in the month of sale and 10% in the month following the sale. The cost of goods sold is 75% of sales. The company desires to have an ending merchandise inventory equal to 60% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $24,700. Monthly depreciation is $16,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 19,000 Accounts receivable 77,000 Inventory 157,500 Property, plant and equipment, net of $502,000 accumulated depreciation 1,002,000 Total assets $ 1,255,500 Liabilities and Stockholders' Equity Accounts payable $ 272,000 Common stock 780,000 Retained earnings 203,500 Total liabilities and stockholders' equity $ 1,255,500 Accounts payable at the end of December would be: A) $231,000 B) $96,000 C) $135,000 D) $240,000

A) $231,000

Coles Corporation, Incorporated makes and sells a single product, Product R. Three yards of Material K are needed to make one unit of Product R. Budgeted production of Product R for the next five months is as follows: August 14,000 units September 14,500 units October 15,500 units November 12,600 units December 11,900 units The company wants to maintain monthly ending inventories of Material K equal to 20% of the following month's production needs. On July 31, this requirement was not met since only 2,500 yards of Material K were on hand. The cost of Material K is $0.85 per yard. The company wants to prepare a Direct Materials Purchase Budget for the rest of the year. The total cost of Material K to be purchased in August is: A) $40,970 B) $48,200 C) $33,840 D) $42,300

A) $40,970

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January. Collections are expected to be 80% in the month of sale and 20% in the month following the sale. The cost of goods sold is 75% of sales. The company would like to maintain ending merchandise inventories equal to 60% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $24,000. Monthly depreciation is $15,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 20,000 Accounts receivable 70,000 Merchandise inventory 153,000 Property, plant and equipment, net of $572,000 accumulated depreciation 1,094,000 Total assets $ 1,337,000 Liabilities and Stockholders' Equity Accounts payable $ 254,000 Common stock 820,000 Retained earnings 263,000 Total liabilities and stockholders' equity $ 1,337,000 The cost of December merchandise purchases would be: A) $255,000 B) $139,500 C) $235,500 D) $240,000

A) $255,000

Catano Corporation pays for 40% of its raw materials purchases in the month of purchase and 60% in the following month. If the budgeted cost of raw materials purchases in July is $256,550 and in August is $278,050, then in August the total budgeted cash disbursements for raw materials purchases is closest to: A) $265,150 B) $153,930 C) $166,830 D) $111,220

A) $265,150

Arciba Incorporated bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 7,400 direct labor-hours will be required in January. The variable overhead rate is $9.50 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $130,980 per month, which includes depreciation of $10,360. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for January should be: A) $27.20 B) $25.80 C) $17.70 D) $9.50

A) $27.20

Carver Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow: Sales are budgeted at $350,000 for November, $320,000 for December, and $300,000 for January. Collections are expected to be 90% in the month of sale and 10% in the month following the sale. The cost of goods sold is 75% of sales. The company desires to have an ending merchandise inventory equal to 60% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $24,700. Monthly depreciation is $16,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 19,000 Accounts receivable 77,000 Inventory 157,500 Property, plant and equipment, net of $502,000 accumulated depreciation 1,002,000 Total assets $ 1,255,500 Liabilities and Stockholders' Equity Accounts payable $ 272,000 Common stock 780,000 Retained earnings 203,500 Total liabilities and stockholders' equity $ 1,255,500 Retained earnings at the end of December would be: A) $289,600 B) $296,000 C) $236,400 D) $203,500

A) $289,600

BW Department Store expects to generate the following sales for the next three months: July August September Expected sales $490,000 $540,000 $580,000 BW's cost of goods sold is 60% of sales dollars. At the end of each month, BW wants a merchandise inventory balance equal to 25% of the following month's expected cost of goods sold. What dollar amount of merchandise inventory should BW plan to purchase in August? A) $330,000 B) $314,600 C) $352,800 D) $327,800

A) $330,000

Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 97 Budgeted unit sales (all on credit): January 10,000 February 12,000 March 13,300 April 15,200 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.5 direct labor-hours Direct labor wage rate $ 23.00 per direct laborhour Predetermined overhead rate (all variable) $ 9.00 per direct laborhour Variable selling and administrative expense $ 3.10 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 30% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs. The estimated finished goods inventory balance at the end of February is closest to: A) $335,160 B) $245,385 C) $281,295 D) $8

A) $335,160

A) $39,300

Sparks Corporation has a cash balance of $10,500 on April 1. The company must maintain a minimum cash balance of $8,500. During April, expected cash receipts are $53,000. Cash disbursements during the month are expected to total $59,500. Ignoring interest payments, during April the company will need to borrow: A) $4,500 B) $4,000 C) $8,500 D) $6,500

A) $4,500

Marty's Merchandise has budgeted sales as follows for the second quarter of the year: April $30,000 May $60,000 June $50,000 Cost of goods sold is equal to 70% of sales. The company wants to maintain a monthly ending inventory equal to 120% of the cost of goods sold for the following month. The inventory on March 31 was below this target and was only $22,000. The company is now preparing a Merchandise Purchases Budget for April, May, and June. The desired beginning inventory for June is: A) $42,000 B) $35,000 C) $50,000 D) $38,000

A) $42,000

Sedita Incorporated is working on its cash budget for July. The budgeted beginning cash balance is $46,000. Budgeted cash receipts total $175,000 and budgeted cash disbursements total $174,000. The desired ending cash balance is $50,000. The excess (deficiency) of cash available over disbursements for July will be: A) $47,000 B) $221,000 C) $45,000 D) $1,000

A) $47,000

LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 3.5 hours of direct labor at the rate of $14.50 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. The budgeted direct labor cost per unit of Product WZ would be: A) $50.75 B) $14.50 C) $4.14 D) $18.00

A) $50.75

Raimondo Corporation makes one product and has provided the following information: a. The budgeted selling price per unit is $89. Budgeted unit sales for August is 8,300 units. b. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.00 per pound. c. The direct labor wage rate is $21.00 per hour. Each unit of finished goods requires 2.6 direct labor-hours. d. Manufacturing overhead is entirely variable and is $7.00 per direct labor-hour. The estimated cost of goods sold for August is closest to: A) $519,580 B) $577,680 C) $670,640 D) $151,060

A) $519,580

Porter Corporation makes and sells a single product called a Yute. The company is in the process of preparing its Selling and Administrative Expense Budget for the last quarter of the year. The following budget data are available: Variable Cost Per Monthly Yute Sold Fixed Cost Sales commissions $ 5.90 Shipping $ 5.30 Advertising $ 8.90 $ 32,000 Executive salaries $ 178,000 Depreciation on office equipment $ 7,000 Other $ 0.60 $ 20,000 All of these expenses (except depreciation) are paid in cash in the month they are incurred. If the company has budgeted to sell 14,000 Yutes in November, then the total budgeted selling and administrative expenses for November would be: A) $526,800 B) $289,800 C) $237,000 D) $519,800

A) $526,800

All of Pocast Corporation's sales are on account. Sixty percent of the credit sales are collected in the month of sale, 30% in the month following sale, and 10% in the second month following sale. The following are budgeted sales data for the company: January February March April Total sales $700,000 $500,000 $400,000 $600,000 Cash receipts in April are expected to be: A) $530,000 B) $360,000 C) $460,000 D) $410,000

A) $530,000

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January. Collections are expected to be 80% in the month of sale and 20% in the month following the sale. The cost of goods sold is 75% of sales. The company would like to maintain ending merchandise inventories equal to 60% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $24,000. Monthly depreciation is $15,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 20,000 Accounts receivable 70,000 Merchandise inventory 153,000 Property, plant and equipment, net of $572,000 accumulated depreciation 1,094,000 Total assets $ 1,337,000 Liabilities and Stockholders' Equity Accounts payable $ 254,000 Common stock 820,000 Retained earnings 263,000 Total liabilities and stockholders' equity $ 1,337,000 The difference between cash receipts and cash disbursements for December would be: A) $54,000 B) $68,600 C) $28,200 D) $12,200

A) $54,000

Crocetti Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 121 Budgeted unit sales (all on credit): January 7,000 February 7,500 March 11,900 April 14,900 Credit sales are collected: 40% in the month of the sale 60% in the following month The budgeted accounts receivable balance at the end of February is closest to: A) $544,500 B) $907,500 C) $605,000 D) $363,000

A) $544,500

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $390,000 for November, $370,000 for December, and $360,000 for January. Collections are expected to be 40% in the month of sale and 60% in the month following the sale. The cost of goods sold is 80% of sales. The company would like to maintain ending merchandise inventories equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $24,500. Monthly depreciation is $15,500. Ignore taxes. Balance Sheet October 31 Assets Cash $ 20,500 Accounts receivable 70,500 Merchandise inventory 218,400 Property, plant and equipment, net of $572,500 accumulated depreciation 1,094,500 Total assets $ 1,403,900 Liabilities and Stockholders' Equity Accounts payable $ 254,500 Common stock 820,500 Retained earnings 328,900 Total liabilities and stockholders' equity $ 1,403,900 The difference between cash receipts and cash disbursements for December would be: A) $56,700 B) $42,525 C) $32,600 D) $101,600

A) $56,700

LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 3.7 hours of direct labor at the rate of $16.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. The budgeted direct labor cost per unit of Product WZ would be: A) $59.20 B) $8.40 C) $16.00 D) $35.80

A) $59.20

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January. Collections are expected to be 65% in the month of sale and 35% in the month following the sale. The cost of goods sold is 80% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $21,100. Monthly depreciation is $21,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 25,000 Accounts receivable 77,000 Merchandise inventory 162,400 Property, plant and equipment, net of $624,000 accumulated depreciation 1,026,000 Total assets $ 1,290,400 Liabilities and Stockholders' Equity Accounts payable $ 239,000 Common stock 740,000 Retained earnings 311,400 Total liabilities and stockholders' equity $ 1,290,400 The cash balance at the end of December would be: A) $69,100 B) $25,000 C) $57,900 D) $38,300

A) $69,100

Parwin Corporation plans to sell 33,000 units during August. If the company has 13,000 units on hand at the start of the month, and plans to have 14,000 units on hand at the end of the month, how many units must be produced during the month? A) 34,000 B) 32,000 C) 47,000 D) 46,000

A) 34,000

Hesterman Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 118 Budgeted unit sales (all on credit): April 7,800 May 9,400 June 14,000 July 12,100 Raw materials requirement per unit of output 3 pounds Raw materials cost $ 3.00 per pound Direct labor requirement per unit of output 2.8 direct labor-hours Direct labor wage rate $ 25.00 per direct labor hour Credit sales are collected: 40% in the month of the sale 60% in the following month The ending finished goods inventory should equal 40% of the following month's sales. The ending raw materials inventory should equal 20% of the following month's raw materials production needs. The estimated direct labor cost for May is closest to: A) $786,800 B) $31,472 C) $534,000 D) $281,000

A) $786,800

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: A) $81,400 B) $21,400 C) $54,270 D) $60,000

A) $81,400

Sirignano Corporation produces and sells one product. The budgeted selling price per unit is $84. Budgeted unit sales for October, November, December, and January are 8,400, 12,000, 13,800, and 14,300 units, respectively. All sales are on credit with 40% collected in the month of the sale and 60% in the following month. The expected cash collections for November are closest to: A) $826,560 B) $705,600 C) $423,360 D) $403,200

A) $826,560

Acti Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year: September $ 830,000 October $ 940,000 November $ 860,000 December $ 780,000 At Acti, 40% of raw materials purchases are normally paid for in the month of purchase. The remaining 60% is paid for in the month following the purchase. How much cash should Acti expect to pay out for raw material purchases during November? A) $908,000 B) $438,000 C) $564,000 D) $344,000

A) $908,000

Rokosz Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $104. Budgeted unit sales for October, November, December, and January are 6,900, 7,100, 11,300, and 15,300 units, respectively. All sales are on credit. b. Regarding credit sales, 30% are collected in the month of the sale and 70% in the following month. c. The ending finished goods inventory equals 20% of the following month's sales. d. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.00 per pound. e. The direct labor wage rate is $23.00 per hour. Each unit of finished goods requires 2.5 direct labor-hours. If 60,500 pounds of raw materials are required for production in December, then the budgeted cost of raw material purchases for November is closest to: A) $91,880 B) $139,520 C) $79,400 D) $115,700

A) $91,880

Sevenbergen Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 92 Budgeted unit sales (all on credit): July 9,000 August 11,300 September 10,400 October 10,800 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.8 direct labor-hours Direct labor wage rate $ 22.00 per direct labor hour Variable selling and administrative expense $ 1.50 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 40% in the month of the sale 60% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 20% of the following month's sales. The ending raw materials inventory should equal 30% of the following month's raw materials production needs. The expected cash collections for August is closest to: A) $912,640 B) $415,840 C) $496,800 D) $828,000

A) $912,640

Harden, Incorporated, has budgeted sales in units for the next five months as follows: June 7,000 units July 5,300 units August 7,100 units September 6,800 units October 4,900 units Past experience has shown that the ending inventory for each month should be equal to 15% of the next month's sales in units. The inventory on May 31 contained 1,050 units. The company needs to prepare a production budget for the next five months. The beginning inventory for September should be: A) 1,020 units B) 1,050 units C) 1,065 units D) 735 units

A) 1,020 units

On October 1, Gala Corporation has 300 units of Product XYZ on hand. The company plans to sell 1,200 units of Product XYZ during October, and plans to have 500 units on hand October 31. How many units of Product XYZ must be produced during October? A) 1,400 B) 1,500 C) 1,000 D) 2,000

A) 1,400

Fiwrt Corporation manufactures and sells stainless steel coffee mugs. Expected mug sales Fiwrt (in units) for the next three months are as follows: October November December Budgeted unit sales 30,000 36,000 34,000 Fiwrt likes to maintain a finished goods inventory equal to 30% of the next month's estimated sales. How many mugs should Fiwrt plan to produce during the month of November? A) 35,400 mugs B) 26,800 mugs C) 36,000 mugs D) 34,300 mugs

A) 35,400 mugs

A) 11,020 units

Michard Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $125. Budgeted unit sales for April, May, June, and July are 7,600, 10,500, 13,800, and 12,900 units, respectively. All sales are on credit. b. Regarding credit sales, 20% are collected in the month of the sale and 80% in the following month. c. The ending finished goods inventory equals 20% of the following month's sales. d. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.00 per pound. e. Regarding raw materials purchases, 30% are paid for in the month of purchase and 70% in the following month. f. The direct labor wage rate is $25.00 per hour. Each unit of finished goods requires 3.0 direct labor-hours. g. The variable selling and administrative expense per unit sold is $3.40. The fixed selling and administrative expense per month is $80,000. The budgeted required production for May is closest to: A) 11,160 units B) 13,260 units C) 15,360 u

A) 11,160

Hesterman Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 118 Budgeted unit sales (all on credit): April 7,800 May 9,400 June 14,000 July 12,100 Raw materials requirement per unit of output 3 pounds Raw materials cost $ 3.00 per pound Direct labor requirement per unit of output 2.8 direct labor-hours Direct labor wage rate $ 25.00 per direct labor hour Credit sales are collected: 40% in the month of the sale 60% in the following month The ending finished goods inventory should equal 40% of the following month's sales. The ending raw materials inventory should equal 20% of the following month's raw materials production needs. The budgeted required production for May is closest to: A) 11,240 units B) 9,400 units C) 15,000 units D) 18,760 units

A) 11,240 units

The Jung Corporation's production budget calls for the following number of units to be produced each quarter for next year: Budgeted production Quarter 1 45,000 units Quarter 2 38,000 units Quarter 3 34,000 units Quarter 4 48,000 units Each unit of product requires three pounds of direct material. The company's policy is to begin each quarter with an inventory of direct materials equal to 30% of that quarter's direct material requirements. Budgeted direct materials purchases for the third quarter would be: A) 114,600 pounds B) 89,400 pounds C) 38,200 pounds D) 29,800 pounds

A) 114,600 pounds

Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 97 Budgeted unit sales (all on credit): January 10,000 February 12,000 March 13,300 April 15,200 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.5 direct labor-hours Direct labor wage rate $ 23.00 per direct laborhour Predetermined overhead rate (all variable) $ 9.00 per direct laborhour Variable selling and administrative expense $ 3.10 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 30% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs. The budgeted required production for February is closest to: A) 12,390 units B) 19,590 units C) 15,990 units D) 12,000 units

A) 12,390 units

Parwin Corporation plans to sell 23,000 units during August. If the company has 8,000 units on hand at the start of the month, and plans to have 9,000 units on hand at the end of the month, how many units must be produced during the month? A) 24,000 B) 22,000 C) 32,000 D) 31,000

A) 24,000

Fuson Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 118 Budgeted unit sales (all on credit): October 9,600 November 10,100 December 13,700 January 11,300 Raw materials requirement per unit of output 3 pounds Raw materials cost $ 4.00 per pound Direct labor requirement per unit of output 2.7 direct labor-hours Direct labor wage rate $ 23.00 per direct labor hour Predetermined overhead rate (all variable) $ 12.00 per direct labor hour Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 10% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs. If 40,380 pounds of raw materials are required for production in December, then the budgeted raw material purchases for November is closest to: A) 32,280 pounds B) 38,556 pounds C) 31,380 pounds D) 35,418 pounds

A) 32,280 pounds

Paradise Corporation budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for next year. Beginning Inventory Ending Inventory Raw material* 30,000 40,000 Finished goods 70,000 60,000 * Three pounds of raw material are needed to produce each unit of finished product. If Paradise Corporation plans to sell 510,000 units during next year, the number of units it would have to manufacture during the year would be: A) 500,000 units B) 520,000 units C) 510,000 units D) 570,000 units

A) 500,000 units

Masde Corporation produces and sells Product CharlieD. To guard against stockouts, the company requires that 25% of the next month's sales be on hand at the end of each month. Budgeted sales of Product CharlieD over the next four months are: June July August September Budgeted sales in units 40,000 60,000 50,000 80,000 Budgeted production for August would be: A) 57,500 units B) 107,000 units C) 77,000 units D) 80,000 units

A) 57,500 units

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 goods 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: A) 58,900 pounds B) 104,900 pounds C) 57,500 pounds D) 81,900 pounds

A) 58,900 pounds

The Tobler Corporation has budgeted production for next year as follows: Quarter First Second Third Fourth Production in units 10,000 12,000 16,000 14,000 Four pounds of raw materials are required for each unit produced. Raw materials on hand at the start of the year total 4,000 pounds. The raw materials inventory at the end of each quarter should equal 10% of the next quarter's production needs. Budgeted purchases of raw materials in the third quarter would be: A) 63,200 pounds B) 62,400 pounds C) 56,800 pounds D) 50,400 pounds

A) 63,200 pounds

Harden, Incorporated, has budgeted sales in units for the next five months as follows: units June 7,100 units July 5,400 units August 7,200 units September 6,900 units October 5,000 units Past experience has shown that the ending inventory for each month should be equal to 10% of the next month's sales in units. The inventory on May 31 contained 710 units. The company needs to prepare a production budget for the next five months. The beginning inventory for September should be: A) 690 units B) 710 units C) 720 units D) 500 units

A) 690 units

Harden, Incorporated, has budgeted sales in units for the next five months as follows: June 7,100 units July 5,400 units August 7,200 units September 6,900 units October 5,000 units Past experience has shown that the ending inventory for each month should be equal to 10% of the next month's sales in units. The inventory on May 31 contained 710 units. The company needs to prepare a production budget for the next five months. The beginning inventory for September should be: A) 690 units B) 710 units C) 720 units D) 500 units

A) 690 units

Roberts Enterprises has budgeted sales in units for the next five months as follows: June 4,500 units July 7,100 units August 5,300 units September 6,700 units October 3,700 units Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on May 31 contained 450 units. The company needs to prepare a production budget for the second quarter of the year. The total number of units to be produced in July is: A) 7,630 units B) 7,100 units C) 6,920 units D) 7,280 units

A) 7,630 units

Rokosz Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $104. Budgeted unit sales for October, November, December, and January are 6,900, 7,100, 11,300, and 15,300 units, respectively. All sales are on credit. b. Regarding credit sales, 30% are collected in the month of the sale and 70% in the following month. c. The ending finished goods inventory equals 20% of the following month's sales. d. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.00 per pound. e. The direct labor wage rate is $23.00 per hour. Each unit of finished goods requires 2.5 direct labor-hours. The budgeted required production for November is closest to: A) 7,940 units B) 10,780 units C) 9,360 units D) 7,100 units

A) 7,940 units

Which of the following statements is NOT correct concerning the Cash Budget? A) It is not necessary to prepare any other budgets before preparing the Cash Budget. B) The Cash Budget should be prepared before the Budgeted Income Statement. C) The Cash Budget should be prepared before the Budgeted Balance Sheet. D) The Cash Budget builds on earlier budgets and schedules as well as additional data.

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

Which of the following statements is true? 1. A benefit from budgeting is that it forces managers to think about and plan for the future. 2. One of the weaknesses of budgets is that they are of little value in uncovering potential bottlenecks. 3. One disadvantage of budgeting is that budgeting makes it more difficult to coordinate the plans and activities of departmental managers. A) Only statement 1one is true. B) Only statement 2 is true. C) All of the statements are true. D) None of the statements are true.

A) Only statement 1one is true.

Which of the following statements is true? 1. The selling and administrative expense budget lists all costs of production other than direct materials and direct labor. 2. The budgeted variable selling and administrative expense is calculated by multiplying the budgeted unit sales by the variable selling and administrative expense per unit. 3. The disbursements section of a cash budget consists of all cash payments for the period except cash payments for dividends. A) Only statement 2 is true. B) Only statement 3 is true. C) All of the statements are true. D) None of the statements are true.

A) Only statement 2 is true.

Which of the following statements is true? 1. The budgeted income statement is typically prepared before the budgeted balance sheet. 2. The cash budget is the starting point in preparing the master budget. 3. The production budget is typically prepared prior to the sales budget. A) Only statement1one is true. B) Only statement 3 is true. C) All of the statements are true. D) None of the statements are true.

A) Only statement1one is true.

The Charade Corporation is preparing its Manufacturing Overhead budget for the fourth quarter of the year. The budgeted variable manufacturing overhead is $5.00 per direct labor- hour; the budgeted fixed manufacturing overhead is $75,000 per month, of which $15,000 is factory depreciation. If the budgeted direct labor time for November is 7,000 hours, then the total budgeted manufacturing overhead for November is: A) $95,000 B) $110,000 C) $75,000 D) $125,000

B) $110,000

When preparing a direct materials budget, the required purchases of raw materials in units equals: A) raw materials needed to meet the production schedule + desired ending inventory of raw materials − beginning inventory of raw materials. B) raw materials needed to meet the production schedule − desired ending inventory of raw materials − beginning inventory of raw materials. C) raw materials needed to meet the production schedule − desired ending inventory of raw materials + beginning inventory of raw materials. D) raw materials needed to meet the production schedule + desired ending inventory of raw materials + beginning inventory of raw materials.

A) raw materials needed to meet the production schedule + desired ending inventory of raw materials − beginning inventory of raw materials.

Michard Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $125. Budgeted unit sales for April, May, June, and July are 7,600, 10,500, 13,800, and 12,900 units, respectively. All sales are on credit. b. Regarding credit sales, 20% are collected in the month of the sale and 80% in the following month. c. The ending finished goods inventory equals 20% of the following month's sales. d. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.00 per pound. e. Regarding raw materials purchases, 30% are paid for in the month of purchase and 70% in the following month. f. The direct labor wage rate is $25.00 per hour. Each unit of finished goods requires 3.0 direct labor-hours. g. The variable selling and administrative expense per unit sold is $3.40. The fixed selling and administrative expense per month is $80,000. The expected cash collections for May is closest to: A) $262,500 B) $1,022,500 C) $760,000 D) $950,00

B) $1,022,500

Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 97 Budgeted unit sales (all on credit): January 10,000 February 12,000 March 13,300 April 15,200 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.5 direct labor-hours Direct labor wage rate $ 23.00 per direct labor hour Predetermined overhead rate (all variable) $ 9.00 per direct labor hour Variable selling and administrative expense $ 3.10 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 30% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs. The expected cash collections for February is closest to: A) $970,000 B) $1,028,200 C) $349,200 D) $679,000

B) $1,028,200

Sevenbergen Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 92 Budgeted unit sales (all on credit): July 9,000 August 11,300 September 10,400 October 10,800 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.8 direct labor-hours Direct labor wage rate $ 22.00 per direct labor hour Variable selling and administrative expense $ 1.50 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 40% in the month of the sale 60% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 20% of the following month's sales. The ending raw materials inventory should equal 30% of the following month's raw materials production needs. The budgeted sales for August is closest to: A) $956,800 B) $1,039,600 C) $993,600 D) $828,000

B) $1,039,600

B) $1,166,000

LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 3.5 hours of direct labor at the rate of $14.50 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. The company plans to sell 39,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 200 and 100 units, respectively. Budgeted direct labor costs for June would be: A) $1,984,325 B) $1,974,175 C) $1,979,250 D) $564,050

B) $1,974,175

Haylock Incorporated bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 7,300 direct labor-hours will be required in August. The variable overhead rate is $1.70 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $100,390 per month, which includes depreciation of $8,960. All other fixed manufacturing overhead costs represent current cash flows. The August cash disbursements for manufacturing overhead on the manufacturing overhead budget should be: A) $12,410 B) $103,840 C) $91,430 D) $112,800

B) $103,840

Bries Corporation is preparing its cash budget for January. The budgeted beginning cash balance is $18,000. Budgeted cash receipts total $183,000 and budgeted cash disbursements total $188,000. The desired ending cash balance is $30,000. The excess (deficiency) of cash available over disbursements for January is: A) $23,000 B) $13,000 C) ($5,000) D) $201,000

B) $13,000

Pooler Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.15 direct labor-hours. The direct labor rate is $7.00 per direct labor-hour. The production budget calls for producing 6,500 units in April and 6,200 units in May. If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months? A) $13,825.00 B) $13,335.00 C) $14,000.00 D) $13,510.00

B) $13,335.00

The Charade Corporation is preparing its Manufacturing Overhead budget for the fourth quarter of the year. The budgeted variable manufacturing overhead is $5 per direct laborhour; the budgeted fixed manufacturing overhead is $95,000 per month, of which $17,000 is factory depreciation. If the budgeted direct labor time for November is 9,000 hours, then the total budgeted manufacturing overhead for November is: A) $123,000 B) $140,000 C) $95,000 D) $157,000

B) $140,000

B) $163,600

Bustillo Incorporated is working on its cash budget for March. The budgeted beginning cash balance is $55,000. Budgeted cash receipts total $139,000 and budgeted cash disbursements total $134,000. The desired ending cash balance is $80,000. To attain its desired ending cash balance for March, the company needs to borrow: A) $140,000 B) $20,000 C) $0 D) $80,000

B) $20,000

The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 1,600 direct labor-hours will be required in February. The variable overhead rate is $3.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $28,320 per month, which includes depreciation of $3,680. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for February should be: A) $3.40 per direct labor-hour B) $21.10 per direct labor-hour C) $17.70 per direct labor-hour D) $18.80 per direct labor-hour

B) $21.10 per direct labor-hour

Avril Incorporated bases its manufacturing overhead budget on budgeted direct labor-hours. The variable overhead rate is $4.60 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $54,080 per month, which includes depreciation of $3,840. All other fixed manufacturing overhead costs represent current cash flows. The direct labor budget indicates that 3,200 direct labor-hours will be required in October. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for October should be: A) $4.60 per direct labor-hour B) $21.50 per direct labor-hour C) $20.30 per direct labor-hour D) $16.90 per direct labor-hour

B) $21.50 per direct labor-hour

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. In June the company has budgeted to produce 22,000 Pods. Budgeted direct labor costs incurred in June would be: A) $470,400 B) $295,680 C) $240,000 D) $211,200

B) $295,680

Luchini Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $111. Budgeted unit sales for April, May, June, and July are 7,100, 10,100, 13,300, and 14,000 units, respectively. All sales are on credit. b. Regarding credit sales, 40% are collected in the month of the sale and 60% in the following month. c. The ending finished goods inventory equals 10% of the following month's sales. d. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $5.00 per pound. e. Regarding raw materials purchases, 40% are paid for in the month of purchase and 60% in the following month. f. The direct labor wage rate is $18.00 per hour. Each unit of finished goods requires 2.9 direct labor-hours. g. Variable manufacturing overhead is $7.00 per direct labor-hour. Fixed manufacturing overhead is zero. If the budgeted cost of raw materials purchases in April is $207,650 and in May is $282,625, then in May the total budgeted cash disburseme

B) $237,640

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January. Collections are expected to be 65% in the month of sale and 35% in the month following the sale. The cost of goods sold is 80% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $21,100. Monthly depreciation is $21,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 25,000 Accounts receivable 77,000 Merchandise inventory 162,400 Property, plant and equipment, net of $624,000 accumulated depreciation 1,026,000 Total assets $ 1,290,400 Liabilities and Stockholders' Equity Accounts payable $ 239,000 Common stock 740,000 Retained earnings 311,400 Total liabilities and stockholders' equity $ 1,290,400 December cash disbursements for merchandise purchases would be: A) $192,000 B) $243,200 C) $117,600 D) $248,000

B) $243,200

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January. Collections are expected to be 80% in the month of sale and 20% in the month following the sale. The cost of goods sold is 75% of sales. The company would like to maintain ending merchandise inventories equal to 60% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $24,000. Monthly depreciation is $15,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 20,000 Accounts receivable 70,000 Merchandise inventory 153,000 Property, plant and equipment, net of $572,000 accumulated depreciation 1,094,000 Total assets $ 1,337,000 Liabilities and Stockholders' Equity Accounts payable $ 254,000 Common stock 820,000 Retained earnings 263,000 Total liabilities and stockholders' equity $ 1,337,000 December cash disbursements for merchandise purchases would be: A) $139,500 B) $246,000 C) $240,000 D) $235,500

B) $246,000

The LaPann Corporation has obtained the following sales forecast data: July August September October Cash sales $ 80,000 $ 70,000 $ 50,000 $ 60,000 Credit sales $ 240,000 $ 220,000 $ 180,000 $ 200,000 The regular pattern of collection of credit sales is 20% in the month of sale, 70% in the month following the month of sale, and the remainder in the second month following the month of sale. There are no bad debts. The budgeted cash receipts for October would be: A) $188,000 B) $248,000 C) $226,000 D) $278,000

B) $248,000

Gusler Corporation makes one product and has provided the following information: Budgeted sales, May 9,500 units Raw materials requirement per unit of output 2 pounds Raw materials cost $ 2.00 per pound Direct labor requirement per unit of output 2.7 direct labor-hours Direct labor wage rate $ 20.00 per direct labor hour Predetermined overhead rate (all variable) $ 10.00 per direct labor hour The estimated cost of goods sold for May is closest to: A) $807,500 B) $256,500 C) $646,000 D) $551,000

B) $256,500

The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 5,800 direct labor-hours will be required in May. The variable overhead rate is $9.10 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $104,400 per month, which includes depreciation of $8,120. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for May should be: A) $9.10 B) $27.10 C) $18.00 D) $25.70

B) $27.10

The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 6,500 direct labor-hours will be required in May. The variable overhead rate is $8.90 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $122,200 per month, which includes depreciation of $24,920. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for May should be: A) $8.90 B) $27.70 C) $24.20 D) $18.80

B) $27.70

Seventy percent of Pitkin Corporation's sales are collected in the month of sale, 20% in the month following sale, and 10% in the second month following sale. The following are budgeted sales data for the company: January February March April Budgeted sales $200,000 $300,000 $350,000 $250,000 Total budgeted cash collections in April would be: A) $175,000 B) $275,000 C) $70,000 D) $30,000

B) $275,000

LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 3.3 hours of direct labor at the rate of $29.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. The company plans to sell 36,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 580 and 160 units, respectively. Budgeted direct labor costs for June would be: A) $1,036,500 B) $3,405,006 C) $3,423,756 D) $3,442,506

B) $3,405,006

Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 6.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows: August 23,000 units September 21,700 units October 23,100 units November 24,300 units December 24,000 units The company wants to maintain monthly ending inventories of Jurislon equal to 20% of the following month's production needs. On July 31, this requirement was not met since only 11,200 kilograms of Jurislon were on hand. The cost of Jurislon is $22 per kilogram. The company wants to prepare a Direct Materials Purchase Budget for the next five months. The total cost of Jurislon to be purchased in August is: A) $1,860,320 B) $3,663,220 C) $3,909,620 D) $3,289,000

B) $3,663,220

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 is factory depreciation. If the budgeted direct labor time for December is 4,000 hours, then the predetermined manufacturing overhead per direct labor-hour for December would be: A) $9.20 B) $30.70 C) $23.20 D) $1.70

B) $30.70

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $460,000 for November, $440,000 for December, and $430,000 for January. Collections are expected to be 45% in the month of sale and 55% in the month following the sale. The cost of goods sold is 80% of sales. The company would like to maintain ending merchandise inventories equal to 60% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $25,200. Monthly depreciation is $16,200. Ignore taxes. Balance Sheet October 31 Assets Cash $ 21,200 Accounts receivable 71,200 Merchandise inventory 220,800 Property, plant and equipment, net of $573,200 accumulated depreciation 1,095,200 Total assets $ 1,408,400 Liabilities and Stockholders' Equity Accounts payable $ 255,200 Common stock 821,200 Retained earnings 332,000 Total liabilities and stockholders' equity $ 1,408,400 December cash disbursements for merchandise purchases would be: A) $206,400 B) $358,400 C) $352,000 D) $347,200

B) $358,400

B) $362,160

Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 97 Budgeted unit sales (all on credit): January 10,000 February 12,000 March 13,300 April 15,200 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.5 direct labor-hours Direct labor wage rate $ 23.00 per direct laborhour Predetermined overhead rate (all variable) $ 9.00 per direct laborhour Variable selling and administrative expense $ 3.10 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 30% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs. The estimated selling and administrative expense for February is closest to: A) $71,470 B) $37,200 C) $107,200

B) $37,200

Darke Corporation makes one product and has provided the following information: a. Budgeted unit sales for October, November, and December are 7,600, 9,000, and 10,100 units respectively. b. The ending finished goods inventory equals 40% of the following month's sales. c. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $1.00 per pound. d. The direct labor wage rate is $19.00 per hour. Each unit of finished goods requires 3.0 direct labor-hours. e. Manufacturing overhead is entirely variable and is $11.00 per direct labor-hour. The estimated finished goods inventory balance at the end of November is closest to: A) $294,920 B) $383,800 C) $133,320 D) $250,480

B) $383,800

Bustillo Incorporated is working on its cash budget for March. The budgeted beginning cash balance is $35,000. Budgeted cash receipts total $142,000 and budgeted cash disbursements total $151,000. The desired ending cash balance is $30,000. To attain its desired ending cash balance for March, the company needs to borrow: A) $0 B) $4,000 C) $56,000 D) $30,000

B) $4,000

KAB Incorporated, a small retail store, had the following results for May. The budgets for June and July are also given. May (actual) June (budget) July (budget) Sales $42,000 $40,000 $45,000 Less cost of goods sold 21,000 20,000 22,500 Gross margin 21,000 20,000 22,500 Less selling and administrative expenses 20,000 20,000 20,000 Net operating income $1,000 $0 $2,500 Sales are collected 80% in the month of the sale and the balance in the month following the sale. (There are no bad debts.) The goods that are sold are purchased in the month prior to sale. Suppliers of the goods are paid in the month following the sale. The "selling and administrative expenses" are paid in the month of the sale. The cash disbursements during June for goods purchased for sale and for selling and administrative expenses should be: A) $40,000 B) $41,000 C) $42,500 D) $43,500

B) $41,000

Schuepfer Incorporated bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 1,800 units are planned to be sold in March. The variable selling and administrative expense is $4.90 per unit. The budgeted fixed selling and administrative expense is $35,680 per month, which includes depreciation of $3,300 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the March selling and administrative expense budget should be: A) $44,500 B) $41,200 C) $32,380 D) $8,820

B) $41,200

Murie Corporation makes one product and has provided the following information: Budgeted selling price per unit $ 98 per unit sold Budgeted unit sales, February 11,000 units Raw materials requirement per unit of output 5 pounds Raw materials cost $ 3.00 per pound Direct labor requirement per unit of output 2.5 direct labor-hours Direct labor wage rate $ 18.00 per direct labor-hour Predetermined overhead rate (all variable) $ 11.00 per direct labor-hour Variable selling and administrative expense $ 2.70 per unit sold Fixed selling and administrative expense $ 80,000 per month The estimated net operating income (loss) for February is closest to: A) $5,800 B) $42,000 C) $35,500 D) $85,800

B) $42,000

Sevenbergen Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 92 Budgeted unit sales (all on credit): July 9,000 August 11,300 September 10,400 October 10,800 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.8 direct labor-hours Direct labor wage rate $ 22.00 per direct laborhour Variable selling and administrative expense $ 1.50 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 40% in the month of the sale 60% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 20% of the following month's sales. The ending raw materials inventory should equal 30% of the following month's raw materials production needs. If 41,920 pounds of raw materials are required for production in September, then the budgeted cost of raw material purchases for August is closest to: A) $57,056 B) $43,712 C) $44,480 D) $70,400

B) $43,712

The LFH Corporation makes and sells a single product, Product T. Each unit of Product T requires 1.5 direct labor-hours at a rate of $10.50 per direct labor-hour. The direct labor workforce is fully adjusted each month to the required workload. LFH Corporation needs to prepare a Direct Labor Budget for the second quarter of next year. The company has budgeted to produce 28,000 units of Product T in June. The finished goods inventories on June 1 and June 30 were budgeted at 800 and 600 units, respectively. Budgeted direct labor costs for June would be: A) $294,000 B) $441,000 C) $444,150 D) $437,850

B) $441,000

The Bandeiras Corporation, a merchandising firm, has budgeted its activity for December according to the following information: Sales at $550,000, all for cash. Merchandise inventory on November 30 was $300,000. The cash balance at December 1 was $25,000. Selling and administrative expenses are budgeted at $60,000 for December and are paid in cash. Budgeted depreciation for December is $35,000. The planned merchandise inventory on December 31 is $270,000. The cost of goods sold is 75% of the sales price. All purchases are paid for in cash. There is no interest expense or income tax expense. The budgeted cash disbursements for December are: A) $382,500 B) $442,500 C) $472,500 D) $477,500

B) $442,500

The Bandeiras Corporation, a merchandising firm, has budgeted its activity for December according to the following information: Sales at $510,000, all for cash. Merchandise inventory on November 30 was $230,000. The cash balance at December 1 was $24,000. Selling and administrative expenses are budgeted at $78,000 for December and are paid in cash. Budgeted depreciation for December is $37,000. The planned merchandise inventory on December 31 is $260,000. The cost of goods sold is 70% of the sales price. All purchases are paid for in cash. There is no interest expense or income tax expense. The budgeted cash receipts for December are: A) $375,000 B) $510,000 C) $135,000 D) $547,000

B) $510,000

Pabon Corporation makes one product. Budgeted unit sales for August and September are 11,100 and 12,600 units, respectively. The ending finished goods inventory equals 40% of the following month's sales. The direct labor wage rate is $19.00 per hour. Each unit of finished goods requires 2.5 direct labor-hours. The estimated direct labor cost for August is closest to: A) $389,000 B) $555,750 C) $29,250 D) $222,300

B) $555,750

Fredericksen Corporation makes one product and has provided the following information: Budgeted sales, February 8,700 units Raw materials requirement per unit of output 6 pounds Raw materials cost $ 2.00 per pound Direct labor requirement per unit of output 2.9 direct labor-hours Direct labor wage rate $ 21.00 per direct labor hour Predetermined overhead rate (all variable) $ 10.00 per direct labor hour Variable selling and administrative expense $ 1.10 per unit sold Fixed selling and administrative expense $ 80,000 per month The estimated cost of goods sold for February is closest to: A) $886,530 B) $634,230 C) $252,300 D) $721,230

B) $634,230

Avril Incorporated bases its manufacturing overhead budget on budgeted direct labor-hours. The variable overhead rate is $4.60 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $54,080 per month, which includes depreciation of $3,840. All other fixed manufacturing overhead costs represent current cash flows. The direct labor budget indicates that 3,200 direct labor-hours will be required in October. The October cash disbursements for manufacturing overhead on the manufacturing overhead budget should be: A) $68,800 B) $64,960 C) $14,720 D) $50,240

B) $64,960

Sevenbergen Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 92 Budgeted unit sales (all on credit): July 9,000 August 11,300 September 10,400 October 10,800 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.8 direct labor-hours Direct labor wage rate $ 22.00 per direct laborhour Variable selling and administrative expense $ 1.50 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 40% in the month of the sale 60% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 20% of the following month's sales. The ending raw materials inventory should equal 30% of the following month's raw materials production needs. The estimated direct labor cost for August is closest to: A) $465,000 B) $684,992 C) $31,136 D) $244,640

B) $684,992

Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 97 Budgeted unit sales (all on credit): January 10,000 February 12,000 March 13,300 April 15,200 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.5 direct labor-hours Direct labor wage rate $ 23.00 per direct laborhour Predetermined overhead rate (all variable) $ 9.00 per direct laborhour Variable selling and administrative expense $ 3.10 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 30% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs. The estimated direct labor cost for February is closest to: A) $284,970 B) $712,425 C) $499,000 D) $30,975

B) $712,425

Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 97 Budgeted unit sales (all on credit): January 10,000 February 12,000 March 13,300 April 15,200 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.5 direct labor-hours Direct labor wage rate $ 23.00 per direct labor hour Predetermined overhead rate (all variable) $ 9.00 per direct labor hour Variable selling and administrative expense $ 3.10 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 30% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs. The budgeted accounts receivable balance at the end of February is closest to: A) $349,200 B) $814,800 C) $7

B) $814,800

Haylock Incorporated bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 5,600 direct labor-hours will be required in August. The variable overhead rate is $5.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $69,440 per month, which includes depreciation of $15,680. All other fixed manufacturing overhead costs represent current cash flows. The August cash disbursements for manufacturing overhead on the manufacturing overhead budget should be: A) $99,680 B) $84,000 C) $53,760 D) $30,240

B) $84,000

Smith Corporation makes and sells a single product called a Pod. Each Pod requires 3.2 direct labor-hours at $11.40 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. In June the company has budgeted to produce 23,800 Pods. Budgeted direct labor costs incurred in June would be: Note: Round your intermediate calculations to 2 decimal places. A) $1,057,239 B) $868,224 C) $345,480 D) $271,320

B) $868,224

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: A) $50,000 B) $89,220 C) $59,480 D) $39,220

B) $89,220

Michard Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $125. Budgeted unit sales for April, May, June, and July are 7,600, 10,500, 13,800, and 12,900 units, respectively. All sales are on credit. b. Regarding credit sales, 20% are collected in the month of the sale and 80% in the following month. c. The ending finished goods inventory equals 20% of the following month's sales. d. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.00 per pound. e. Regarding raw materials purchases, 30% are paid for in the month of purchase and 70% in the following month. f. The direct labor wage rate is $25.00 per hour. Each unit of finished goods requires 3.0 direct labor-hours. g. The variable selling and administrative expense per unit sold is $3.40. The fixed selling and administrative expense per month is $80,000. If 54,480 pounds of raw materials are required for production in June, then the budgeted cost of raw

B) $89,280

B) $927,300

Hesterman Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 118 Budgeted unit sales (all on credit): April 7,800 May 9,400 June 14,000 July 12,100 Raw materials requirement per unit of output 3 pounds Raw materials cost $ 3.00 per pound Direct labor requirement per unit of output 2.8 direct labor-hours Direct labor wage rate $ 25.00 per direct labor hour Credit sales are collected: 40% in the month of the sale 60% in the following month The ending finished goods inventory should equal 40% of the following month's sales. The ending raw materials inventory should equal 20% of the following month's raw materials production needs. The expected cash collections for May is closest to: A) $920,400 B) $995,920 C) $552,240 D) $443,680

B) $995,920

Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year. Beginning Inventory Ending Inventory Finished goods (units) 25,000 75,000 Raw material (grams) 55,000 45,000 Each unit of finished goods requires 2 grams of raw material. The company plans to sell 720,000 units during the year. How much of the raw material should the company purchase during the year? A) 1,555,000 grams B) 1,530,000 grams C) 1,585,000 grams D) 1,540,000 grams

B) 1,530,000 grams

Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year. Beginning Inventory Ending Inventory Finished goods (units) 20,000 30,000 Raw material (grams) 50,000 40,000 Each unit of finished goods requires 7 grams of raw material. The company plans to sell 270,000 units during the year. How much of the raw material should the company purchase during the year? A) 1,960,000 grams B) 1,950,000 grams C) 1,970,000 grams D) 2,000,000 grams

B) 1,950,000 grams

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: A) 11,600 units B) 11,940 units C) 14,260 units D) 16,580 units

B) 11,940 units

Reaser Corporation makes one product. April May June July Budgeted unit sales 8,400 8,700 12,600 13,100 Each unit of finished goods requires 4 pounds of raw materials. The ending finished goods inventory equals 10% of the following month's sales. The ending raw materials inventory equals 40% of the following month's raw materials production needs. If 50,600 pounds of raw materials are required for production in June, then the budgeted raw material purchases for May is closest to: A) 56,600 pounds B) 42,056 pounds C) 71,144 pounds D) 36,360 pounds

B) 42,056 pounds

Coles Corporation, Incorporated makes and sells a single product, Product R. Three yards of Material K are needed to make one unit of Product R. Budgeted production of Product R for the next five months is as follows: August 14,000 units September 14,500 units October 15,500 units November 12,600 units December 11,900 units The company wants to maintain monthly ending inventories of Material K equal to 20% of the following month's production needs. On July 31, this requirement was not met since only 2,500 yards of Material K were on hand. The cost of Material K is $0.85 per yard. The company wants to prepare a Direct Materials Purchase Budget for the rest of the year. The total needs (i.e., production requirements plus desired ending inventory) of Material K for November are: A) 37,800 yards B) 44,940 yards C) 37,380 yards D) 45,360 yards

B) 44,940 yards

Paradise Corporation budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for next year. Beginning Inventory Ending Inventory Raw material* 48,000 58,000 Finished goods 88,000 58,000 * Three pounds of raw material are needed to produce each unit of finished product. If Paradise Corporation plans to sell 520,000 units during next year, the number of units it would have to manufacture during the year would be: A) 490,000 units B) 472,000 units C) 520,000 units D) 550,000 units

B) 472,000 units

Frolic Corporation has budgeted sales and production over the next quarter as follows: July August September Sales in units 49,500 61,500 ?question mark Production in units 49,750 61,800 66,150 The company has 5,900 units of product on hand at July 1. 10% of the next month's sales in units should be on hand at the end of each month. October sales are expected to be 81,000 units. Budgeted sales for September would be (in units): A) 74,250 B) 64,500 C) 72,300 D) 73,500

B) 64,500

Roberts Enterprises has budgeted sales in units for the next five months as follows: June 4,500 units July 7,100 units August 5,300 units September 6,700 units October 3,700 units Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on May 31 contained 450 units. The company needs to prepare a production budget for the second quarter of the year. The desired ending inventory for August is: A) 530 units B) 670 units C) 710 units D) 370 units

B) 670 units

Garry Corporation's most recent production budget indicates the following required production: October November December Required production (units) 210,000 175,000 110,000 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 to purchase for the month of November? A) 1,006,250 B) 793,750 C) 1,012,500 D) 893,500

B) 793,750

Frolic Corporation has budgeted sales and production over the next quarter as follows: July August September Sales in units 70,000 83,000 ? Production in units 73,250 84,750 91,750 The company has 17,500 units of product on hand at July 1. 25% of the next month's sales in units should be on hand at the end of each month. October sales are expected to be 97,000 units. Budgeted sales for September would be (in units): A) 88,000 B) 90,000 C) 86,000 D) 84,000

B) 90,000

Which of the following statements is true? 1. In a production budget, if the number of units in finished goods inventory at the end of the period is less than the number of units in finished goods inventory at the beginning of the period, then the expected number of units sold is less than the number of units to be produced during the period. 2. In the merchandise purchases budget, the required purchases (in units) for a period can be determined by subtracting the beginning merchandise inventory (in units) from the budgeted sales (in units) and desired ending merchandise inventory (in units). 3. When preparing a direct materials budget, beginning inventory for raw materials should be added to production needs, and desired ending inventory should be subtracted to determine the amount of raw materials to be purchased. A) Only statement1one is true. B) Only statement 2 is true. C) All of the statements are true. D) None of the statements are true.

B) Only statement 2 is true.

Which of the following statements is true? 1. Budgets are used for the distinct purposes of planning and profit. 2. Control involves developing goals and preparing various budgets to achieve those goals. 3. A continuous or perpetual budget is a 12-month budget that rolls forward one month (or quarter) as the current month (or quarter) is completed. A) Only statement1one is true. B) Only statement 3 is true. C) All of the statements are true. D) None of the statements are true.

B) Only statement 3 is true.

Which of the following statements is NOT correct concerning the Manufacturing Overhead Budget? A) The Manufacturing Overhead Budget provides a schedule of all costs of production other than direct materials and labor costs. B) The Manufacturing Overhead Budget shows only the variable portion of manufacturing overhead. C) The Manufacturing Overhead Budget shows the expected cash disbursements for manufacturing overhead. D) The Manufacturing Overhead Budget is prepared after the Sales Budget.

B) The Manufacturing Overhead Budget shows only the variable portion of manufacturing overhead.

Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 97 Budgeted unit sales (all on credit): January 10,000 February 12,000 March 13,300 April 15,200 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.5 direct labor-hours Direct labor wage rate $ 23.00 per direct labor hour Predetermined overhead rate (all variable) $ 9.00 per direct labor hour Variable selling and administrative expense $ 3.10 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 30% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs. The budgeted sales for February is closest to: A) $1,474,400 B) $1,290,100 C) $1,164,000 D) $970,000

C) $1,164,000

Michard Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $125. Budgeted unit sales for April, May, June, and July are 7,600, 10,500, 13,800, and 12,900 units, respectively. All sales are on credit. b. Regarding credit sales, 20% are collected in the month of the sale and 80% in the following month. c. The ending finished goods inventory equals 20% of the following month's sales. d. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.00 per pound. e. Regarding raw materials purchases, 30% are paid for in the month of purchase and 70% in the following month. f. The direct labor wage rate is $25.00 per hour. Each unit of finished goods requires 3.0 direct labor-hours. g. The variable selling and administrative expense per unit sold is $3.40. The fixed selling and administrative expense per month is $80,000. The budgeted sales for May is closest to: A) $1,725,000 B) $950,000 C) $1,312,500 D) $1,612,500

C) $1,312,500

The LaGrange Corporation had the following budgeted sales for the first half of the current year: Cash Sales Credit Sales January $ 60,000 $ 160,000 February $ 65,000 $ 180,000 March $ 33,000 $ 140,000 April $ 28,000 $ 113,000 May $ 38,000 $ 210,000 June $ 90,000 $ 70,000 The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled: Collections on sales: 45% in month of sale 30% in month following sale 25% in second month following sale The accounts receivable balance on January 1 of the current year was $67,000, of which $55,000 represents uncollected December sales and $12,000 represents uncollected November sales. What is the budgeted accounts receivable balance on May 31? A) $131,750 B) $115,500 C) $143,750 D) $275,500

C) $143,750

Varughese Incorporated is working on its cash budget for March. The budgeted beginning cash balance is $33,000. Budgeted cash receipts total $182,000 and budgeted cash disbursements total $191,000. The desired ending cash balance is $40,000. To attain its desired ending cash balance for March, the company needs to borrow: A) $40,000 B) $0 C) $16,000 D) $64,000

C) $16,000

The LaPann Corporation has obtained the following sales forecast data: July August September October Cash sales $ 80,000 $ 70,000 $ 50,000 $ 60,000 Credit sales $ 240,000 $ 220,000 $ 180,000 $ 200,000 The regular pattern of collection of credit sales is 20% in the month of sale, 70% in the month following the month of sale, and the remainder in the second month following the month of sale. There are no bad debts. The budgeted accounts receivable balance on September 30 would be: A) $126,000 B) $148,000 C) $166,000 D) $190,000

C) $166,000

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: A) $114,413 B) $140,333 C) $171,619 D) $286,032

C) $171,619

Tracie Corporation manufactures and sells women's skirts. Each skirt (unit) requires 2.2 yards of cloth. Selected data from Tracie's master budget for next quarter are shown below: July August September Budgeted sales (in units) 7,000 9,000 11,000 Budgeted production (in units) 8,000 10,500 13,000 Each unit requires 0.8 hours of direct labor, and the average hourly cost of Tracie's direct labor is $18. What is the cost of Tracie Corporation's direct labor in September? A) $198,000 B) $158,400 C) $187,200 D) $234,000

C) $187,200

Tracie Corporation manufactures and sells women's skirts. Each skirt (unit) requires 2.2 yards of cloth. Selected data from Tracie's master budget for next quarter are shown below: July August September Budgeted sales (in units) 8,100 10,100 12,100 Budgeted production (in units) 9,100 11,600 14,100 Each unit requires 0.7 hours of direct labor, and the average hourly cost of Tracie's direct labor is $20. What is the cost of Tracie Corporation's direct labor in September? A) $242,000 B) $169,400 C) $197,400 D) $282,000

C) $197,400

Wasilko Corporation produces and sells one product. a. The budgeted selling price per unit is $114. Budgeted unit sales for February is 9,900 units. b. Each unit of finished goods requires 6 pounds of raw materials. The raw materials cost $4.00 per pound. c. The direct labor wage rate is $24.00 per hour. Each unit of finished goods requires 2.4 direct labor-hours. d. Manufacturing overhead is entirely variable and is $9.00 per direct labor-hour. e. The variable selling and administrative expense per unit sold is $1.60. The fixed selling and administrative expense per month is $70,000. The estimated net operating income (loss) for February is closest to: A) $50,000 B) $91,080 C) $21,080 D) $36,920

C) $21,080

Varughese Incorporated is working on its cash budget for March. The budgeted beginning cash balance is $33,000. Budgeted cash receipts total $182,000 and budgeted cash disbursements total $191,000. The desired ending cash balance is $40,000. The excess (deficiency) of cash available over disbursements for March will be: A) $215,000 B) $42,000 C) $24,000 D) ($9,000)

C) $24,000

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $350,000 for November, $330,000 for December, and $320,000 for January. Collections are expected to be 45% in the month of sale and 55% in the month following the sale. The cost of goods sold is 75% of sales. The company would like to maintain ending merchandise inventories equal to 80% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $24,100. Monthly depreciation is $15,100. Ignore taxes. Balance Sheet October 31 Assets Cash $ 20,100 Accounts receivable 70,100 Merchandise inventory 210,000 Property, plant and equipment, net of $572,100 accumulated depreciation 1,094,100 Total assets $ 1,394,300 Liabilities and Stockholders' Equity Accounts payable $ 254,100 Common stock 820,100 Retained earnings 320,100 Total liabilities and stockholders' equity $ 1,394,300 The cost of December merchandise purchases would be: A) $262,500 B) $192,000 C) $241,500 D) $247,500

C) $241,500

The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 1,600 direct labor-hours will be required in February. The variable overhead rate is $3.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $28,320 per month, which includes depreciation of $3,680. All other fixed manufacturing overhead costs represent current cash flows. The February cash disbursements for manufacturing overhead on the manufacturing overhead budget should be: A) $24,640 B) $33,760 C) $30,080 D) $5,440

C) $30,080

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January. Collections are expected to be 65% in the month of sale and 35% in the month following the sale. The cost of goods sold is 80% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $21,100. Monthly depreciation is $21,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 25,000 Accounts receivable 77,000 Merchandise inventory 162,400 Property, plant and equipment, net of $624,000 accumulated depreciation 1,026,000 Total assets $ 1,290,400 Liabilities and Stockholders' Equity Accounts payable $ 239,000 Common stock 740,000 Retained earnings 311,400 Total liabilities and stockholders' equity $ 1,290,400 Expected cash collections in December are: A) $310,000 B) $101,500 C) $303,000 D) $201,500

C) $303,000

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $307,000 for November, $327,000 for December, and $227,000 for January. Collections are expected to be 60% in the month of sale and 40% in the month following the sale. The cost of goods sold is 75% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 90% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $22,800. Monthly depreciation is $29,500. Ignore taxes. Balance Sheet October 31 Assets Cash $ 35,000 Accounts receivable 85,500 Merchandise inventory 290,400 Property, plant and equipment, net of $624,000 accumulated depreciation 922,000 Total assets $ 1,332,900 Liabilities and Stockholders' Equity Accounts payable $ 256,000 Common stock 757,000 Retained earnings 319,900 Total liabilities and stockholders' equity $ 1,332,900 Expected cash collections in December are: A) $327,000 B) $122,800 C) $319,000 D) $196,200

C) $319,000

Sleeter Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. Budgeted unit sales for April, May, June, and July are 7,500, 11,900, 10,800, and 14,800 units, respectively. All sales are on credit. b. The ending finished goods inventory equals 30% of the following month's sales. c. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 6 pounds of raw materials. The raw materials cost $5.00 per pound. If 72,000 pounds of raw materials are required for production in June, then the budgeted cost of raw material purchases for May is closest to: A) $559,230 B) $455,100 C) $350,970 D) $347,100

C) $350,970

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $281,000 for November, $321,000 for December, and $212,000 for January. Collections are expected to be 75% in the month of sale and 25% in the month following the sale. The cost of goods sold is 75% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 90% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $20,100. Monthly depreciation is $22,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 29,000 Accounts receivable 78,000 Merchandise inventory 189,675 Property, plant and equipment, net of $624,000 accumulated depreciation 1,006,000 Total assets $ 1,302,675 Liabilities and Stockholders' Equity Accounts payable $ 241,000 Common stock 742,000 Retained earnings 319,675 Total liabilities and stockholders' equity $ 1,302,675 Retained earnings at the end of December would be: A) $364,875 B) $319,675 C) $385,975 D) $361,675

C) $385,975

The Puyer Corporation makes and sells only one product called a Deb. The company is in the process of preparing its Selling and Administrative Expense Budget for next year. The following budget data are available: Monthly Fixed Cost Variable Cost Per Deb Sold Sales commissions $ 0.90 Shipping $ 1.40 Advertising $ 50,000 $ 0.20 Executive salaries $ 60,000 Depreciation on office equipment $ 20,000 Other $ 40,000 All of these expenses (except depreciation) are paid in cash in the month they are incurred. If the company has budgeted to sell 16,000 Debs in January, then the total budgeted variable selling and administrative expenses for January will be: A) $17,600 B) $25,600 C) $40,000 D) $36,800

C) $40,000

KAB Incorporated, a small retail store, had the following results for May. The budgets for June and July are also given. May (actual) June (budget) July (budget) Sales $42,000 $40,000 $45,000 Less cost of goods sold 21,000 20,000 22,500 Gross margin 21,000 20,000 22,500 Less selling and administrative expenses 20,000 20,000 20,000 Net operating income $1,000 $0 $2,500 Sales are collected 80% in the month of the sale and the balance in the month following the sale. (There are no bad debts.) The goods that are sold are purchased in the month prior to sale. Suppliers of the goods are paid in the month following the sale. The "selling and administrative expenses" are paid in the month of the sale. The amount of cash collected during June should be: A) $32,000 B) $40,000 C) $40,400 D) $41,000

C) $40,400

The Bandeiras Corporation, a merchandising firm, has budgeted its activity for December according to the following information: Sales at $550,000, all for cash. Merchandise inventory on November 30 was $300,000. The cash balance at December 1 was $25,000. Selling and administrative expenses are budgeted at $60,000 for December and are paid in cash. Budgeted depreciation for December is $35,000. The planned merchandise inventory on December 31 is $270,000. The cost of goods sold is 75% of the sales price. All purchases are paid for in cash. There is no interest expense or income tax expense. The budgeted net income for December is: A) $107,500 B) $137,500 C) $42,500 D) $77,500

C) $42,500

Rokosz Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $104. Budgeted unit sales for October, November, December, and January are 6,900, 7,100, 11,300, and 15,300 units, respectively. All sales are on credit. b. Regarding credit sales, 30% are collected in the month of the sale and 70% in the following month. c. The ending finished goods inventory equals 20% of the following month's sales. d. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.00 per pound. e. The direct labor wage rate is $23.00 per hour. Each unit of finished goods requires 2.5 direct labor-hours. The estimated direct labor cost for November is closest to: A) $320,000 B) $182,620 C) $456,550 D) $19,850

C) $456,550

Acti Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year: September $ 830,000 October $ 940,000 November $ 860,000 December $ 780,000 At Acti, 40% of raw materials purchases are normally paid for in the month of purchase. The remaining 60% is paid for in the month following the purchase. In Acti's budgeted balance sheet at December 31, at what amount will accounts payable for raw materials be shown? A) $780,000 B) $564,000 C) $468,000 D) $588,000

C) $468,000

Jeanclaude Corporation produces and sells one product. The budgeted selling price per unit is $105. Budgeted unit sales for July, August, September, and October are 7,400, 7,500, 13,800, and 15,300 units, respectively. All sales are on credit. Regarding credit sales, 40% are collected in the month of the sale and 60% in the following month. The budgeted accounts receivable balance at the end of August is closest to: A) $525,000 B) $315,000 C) $472,500 D) $787,500

C) $472,500

The manufacturing overhead budget at Franklyn Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 4,400 direct labor-hours will be required in January. The variable overhead rate is $1.30 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $60,280 per month, which includes depreciation of $17,160. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be: A) $5,720 B) $43,120 C) $48,840 D) $66,000

C) $48,840

The manufacturing overhead budget at Franklyn Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,200 direct labor-hours will be required in January. The variable overhead rate is $7 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,060 per month, which includes depreciation of $3,700. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be: A) $58,460 B) $15,400 C) $54,760 D) $39,360

C) $54,760

Sparks Corporation has a cash balance of $18,000 on April 1. The company must maintain a minimum cash balance of $10,000. During April, expected cash receipts are $98,000. Cash disbursements during the month are expected to total $112,000. Ignoring interest payments, during April the company will need to borrow: A) $8,000 B) $2,000 C) $6,000 D) $4,000

C) $6,000

Pooler Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.60 direct labor-hours. The direct labor rate is $8.00 per direct labor-hour. The production budget calls for producing 6,600 units in April and 6,400 units in May. If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months? A) $62,890 B) $63,065 C) $62,400 D) $62,575

C) $62,400

C) $658,996

Luchini Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $111. Budgeted unit sales for April, May, June, and July are 7,100, 10,100, 13,300, and 14,000 units, respectively. All sales are on credit. b. Regarding credit sales, 40% are collected in the month of the sale and 60% in the following month. c. The ending finished goods inventory equals 10% of the following month's sales. d. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $5.00 per pound. e. Regarding raw materials purchases, 40% are paid for in the month of purchase and 60% in the following month. f. The direct labor wage rate is $18.00 per hour. Each unit of finished goods requires 2.9 direct labor-hours. g. Variable manufacturing overhead is $7.00 per direct labor-hour. Fixed manufacturing overhead is zero. The budgeted accounts receivable balance at the end of May is closest to: A) $747,000 B) $448,440 C) $672,660 D) $1,121,100

C) $672,660

Rokosz Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $104. Budgeted unit sales for October, November, December, and January are 6,900, 7,100, 11,300, and 15,300 units, respectively. All sales are on credit. b. Regarding credit sales, 30% are collected in the month of the sale and 70% in the following month. c. The ending finished goods inventory equals 20% of the following month's sales. d. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.00 per pound. e. The direct labor wage rate is $23.00 per hour. Each unit of finished goods requires 2.5 direct labor-hours. The expected cash collections for November is closest to: A) $502,320 B) $221,520 C) $723,840 D) $717,600

C) $723,840

The LaGrange Corporation had the following budgeted sales for the first half of the current year: Cash Sales Credit Sales January $70,000 $340,000 February $50,000 $190,000 March $40,000 $135,000 April $35,000 $120,000 May $45,000 $160,000 June $40,000 $140,000 The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled: Collections on sales: 60% in month of sale 30% in month following sale 10% in second month following sale The accounts receivable balance on January 1 of the current year was $70,000, of which $50,000 represents uncollected December sales and $20,000 represents uncollected November sales. What is the budgeted accounts receivable balance on May 31? A) $56,000 B) $64,000 C) $76,000 D) $132,000

C) $76,000

The selling and administrative expense budget of Choo Corporation is based on budgeted unit sales, which are 4,600 units for August. The variable selling and administrative expense is $7.30 per unit. The budgeted fixed selling and administrative expense is $51,980 per month, which includes depreciation of $6,440 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the August selling and administrative expense budget should be: A) $85,560 B) $45,540 C) $79,120 D) $33,580

C) $79,120

C) $816,200

Michard Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $125. Budgeted unit sales for April, May, June, and July are 7,600, 10,500, 13,800, and 12,900 units, respectively. All sales are on credit. b. Regarding credit sales, 20% are collected in the month of the sale and 80% in the following month. c. The ending finished goods inventory equals 20% of the following month's sales. d. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.00 per pound. e. Regarding raw materials purchases, 30% are paid for in the month of purchase and 70% in the following month. f. The direct labor wage rate is $25.00 per hour. Each unit of finished goods requires 3.0 direct labor-hours. g. The variable selling and administrative expense per unit sold is $3.40. The fixed selling and administrative expense per month is $80,000. The estimated direct labor cost for May is closest to: A) $558,000 B) $33,480 C) $837,000 D) $27

C) $837,000

Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 97 Budgeted unit sales (all on credit): January 10,000 February 12,000 March 13,300 April 15,200 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.5 direct labor-hours Direct labor wage rate $ 23.00 per direct laborhour Predetermined overhead rate (all variable) $ 9.00 per direct laborhour Variable selling and administrative expense $ 3.10 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 30% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs. The estimated unit product cost is closest to: A) $70.50 B) $22.50 C) $84.00 D) $61.50

C) $84.00

C) $88,020

The following are budgeted data: January February March Sales in units 15,000 20,000 18,000 Production in units 18,000 19,000 16,000 One pound of material is required for each finished unit. The inventory of materials at the end of each month should equal 20% of the following month's production needs. Purchases of raw materials for February would be budgeted to be: A) 19,600 pounds B) 20,400 pounds C) 18,400 pounds D) 18,600 pounds

C) 18,400 pounds

The following are budgeted data: January February March Sales in units 15,400 20,800 18,400 Production in units 18,400 19,400 17,300 One pound of material is required for each finished unit. The inventory of materials at the end of each month should equal 25% of the following month's production needs. Purchases of raw materials for February would be budgeted to be: A) 19,925 pounds B) 19,975 pounds C) 18,875 pounds D) 18,525 pounds

C) 18,875 pounds

Stut Corporation, a retailer, plans to sell 28,000 units of Product X during the month of August. If the company has 6,000 units on hand at the start of the month, and plans to have 9,000 units on hand at the end of the month, how many units of Product X must be purchased from the supplier during the month? A) 37,000 B) 25,000 C) 31,000 D) 28,000

C) 31,000

Sevenbergen Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 92 Budgeted unit sales (all on credit): July 9,000 August 11,300 September 10,400 October 10,800 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.8 direct labor-hours Direct labor wage rate $ 22.00 per direct laborhour Variable selling and administrative expense $ 1.50 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 40% in the month of the sale 60% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 20% of the following month's sales. The ending raw materials inventory should equal 30% of the following month's raw materials production needs. If 41,920 pounds of raw materials are required for production in September, then the budgeted raw material purchases for August is closest to: A) 57,056 pounds B) 44,480 pounds C) 43,712 pounds D) 70,400 po

C) 43,712 pounds

Harden, Incorporated, has budgeted sales in units for the next five months as follows: June 7,000 units July 5,300 units August 7,100 units September 6,800 units October 4,900 units Past experience has shown that the ending inventory for each month should be equal to 15% of the next month's sales in units. The inventory on May 31 contained 1,050 units. The company needs to prepare a production budget for the next five months. The total number of units produced in July should be: A) 5,300 units B) 6,365 units C) 5,570 units D) 5,030 units

C) 5,570 units

Roberts Enterprises has budgeted sales in units for the next five months as follows: June 4,650 units July 7,850 units August 5,450 units September 7,000 units October 3,850 units Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on May 31 contained 465 units. The company needs to prepare a production budget for the second quarter of the year. The total number of units to be produced in July is: A) 8,395 units B) 7,850 units C) 7,610 units D) 8,008 units

C) 7,610 units

The Charade Corporation is preparing its Manufacturing Overhead budget for the fourth quarter of the year. The budgeted variable manufacturing overhead is $5.00 per direct labor- hour; the budgeted fixed manufacturing overhead is $75,000 per month, of which $15,000 is factory depreciation. If the budgeted cash disbursements for manufacturing overhead for December total $105,000, then the budgeted direct labor-hours for December must be: A) 6,000 direct labor-hours B) 21,000 direct labor-hours C) 9,000 direct labor-hours D) 3,000 direct labor-hours

C) 9,000 direct labor-hours

Cardle Corporation makes one product. Budgeted unit sales are shown below: January February March April Budgeted unit sales 7,300 8,600 10,100 13,600 The ending finished goods inventory should equal 30% of the following month's sales. The budgeted required production for February is closest to: A) 11,630 units B) 14,210 units C) 9,050 units D) 8,600 units

C) 9,050 units

Which of the following statements is true? 1. The master budget consists of a number of separate but interdependent budgets. 2. The production budget is typically prepared before the direct materials budget. 3. The selling and administrative budget is typically prepared before the cash budget. A) Only statement 2 is true. B) Only statement 3 is true. C) All of the statements are true. D) None of the statements are true.

C) All of the statements are true.

Which of the following statements is true? 1. Cash collections in a schedule of cash collections typically consist of collections on sales made to customers in prior periods plus collections on sales made in the current budget period. 2. The number of units to be produced in a period can be determined by adding the expected sales to the desired ending inventory and then deducting the beginning inventory. A) Only statement 1one is true. B) Only statement 2 is true. C) Both statements are true. D) Neither statement is true.

C) Both statements are true.

Which of the following statements is true? 1. The direct labor budget begins with the required production in units from the production budget. 2. The direct labor budget shows the direct labor-hours required to satisfy the production budget. A) Only statement1one is true. B) Only statement 2 is true. C) Both statements are true. D) Neither statement is true.

C) Both statements are true.

Which of the following statements is true? 1. In the manufacturing overhead budget, the non-cash charges (such as depreciation) are deducted from the total budgeted manufacturing overhead to determine the expected cash disbursements for manufacturing overhead. 2. The manufacturing overhead budget lists all costs of production other than direct materials and direct labor. A) Only statement1one is true. B) Only statement 2 is true. C) Both statements are true. D) Neither statement is true.

C) Both statements are true.

There are various budgets within the master budget. One of these budgets is the production budget. Which of the following BEST describes the production budget? A) It details the required direct labor hours. B) It details the required raw materials purchases. C) It is calculated based on the sales budget and the desired ending inventory. D) It summarizes the costs of producing units for the budget period.

C) It is calculated based on the sales budget and the desired ending inventory.

The usual starting point for a master budget is: A) the direct materials purchase budget. B) the budgeted income statement. C) the sales forecast or sales budget. D) the production budget.

C) the sales forecast or sales budget.

Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 97 Budgeted unit sales (all on credit): January 10,000 February 12,000 March 13,300 April 15,200 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.5 direct labor-hours Direct labor wage rate $ 23.00 per direct laborhour Predetermined overhead rate (all variable) $ 9.00 per direct laborhour Variable selling and administrative expense $ 3.10 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 30% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs. The estimated cost of goods sold for February is closest to: A) $846,000 B) $270,000 C) $738,000 D) $1,

D) $1,008,000

Corvi Corporation produces and sells one product. The budgeted selling price per unit is $126. Budgeted unit sales are shown below: July August September October Budgeted unit sales 7,300 11,500 14,200 12,100 All sales are on credit with 40% collected in the month of the sale and 60% in the following month. The expected cash collections for August is closest to: A) $551,880 B) $579,600 C) $919,800 D) $1,131,480

D) $1,131,480

D) $100.60

Hesterman Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 118 Budgeted unit sales (all on credit): April 7,800 May 9,400 June 14,000 July 12,100 Raw materials requirement per unit of output 3 pounds Raw materials cost $ 3.00 per pound Direct labor requirement per unit of output 2.8 direct labor-hours Direct labor wage rate $ 25.00 per direct labor hour Credit sales are collected: 40% in the month of the sale 60% in the following month The ending finished goods inventory should equal 40% of the following month's sales. The ending raw materials inventory should equal 20% of the following month's raw materials production needs. If 39,720 pounds of raw materials are required for production in June, then the budgeted cost of raw material purchases for May is closest to: A) $145,224 B) $124,992 C) $101,160 D) $104,760

D) $104,760

Knappert Corporation makes one product and has provided the following information: a. Each unit of finished goods requires 3 pounds of raw materials. The raw materials cost $5.00 per pound. b. The direct labor wage rate is $24.00 per hour. Each unit of finished goods requires 2.8 direct labor-hours. c. Manufacturing overhead is entirely variable and is $11.00 per direct labor-hour. d. The variable selling and administrative expense per unit sold is $3.80. The fixed selling and administrative expense per month is $50,000. The unit product cost is closest to: A) $82.20 B) $93.20 C) $30.80 D) $113.00

D) $113.00

Fuson Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 118 Budgeted unit sales (all on credit): October 9,600 November 10,100 December 13,700 January 11,300 Raw materials requirement per unit of output 3 pounds Raw materials cost $ 4.00 per pound Direct labor requirement per unit of output 2.7 direct labor-hours Direct labor wage rate $ 23.00 per direct labor hour Predetermined overhead rate (all variable) $ 12.00 per direct labor hour Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 10% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs. If the budgeted cost of raw materials purchases in October is $116,772 and in November is $129,120, then in November the total budgeted cash disbursements for raw materials purchases is closest to: A) $81,740 B) $90,384 C) $38,736 D) $120,

D) $120,476

Luchini Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $111. Budgeted unit sales for April, May, June, and July are 7,100, 10,100, 13,300, and 14,000 units, respectively. All sales are on credit. b. Regarding credit sales, 40% are collected in the month of the sale and 60% in the following month. c. The ending finished goods inventory equals 10% of the following month's sales. d. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $5.00 per pound. e. Regarding raw materials purchases, 40% are paid for in the month of purchase and 60% in the following month. f. The direct labor wage rate is $18.00 per hour. Each unit of finished goods requires 2.9 direct labor-hours. g. Variable manufacturing overhead is $7.00 per direct labor-hour. Fixed manufacturing overhead is zero. The estimated finished goods inventory balance at the end of May is closest to: A) $102,676 B) $111,986 C) $26,999 D) $129,675

D) $129,675

D) $133,308

Fuson Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 118 Budgeted unit sales (all on credit): October 9,600 November 10,100 December 13,700 January 11,300 Raw materials requirement per unit of output 3 pounds Raw materials cost $ 4.00 per pound Direct labor requirement per unit of output 2.7 direct labor-hours Direct labor wage rate $ 23.00 per direct labor hour Predetermined overhead rate (all variable) $ 12.00 per direct labor hour Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 10% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs. The estimated finished goods inventory balance at the end of November is closest to: A) $44,388 B) $117,957 C) $101,517 D) $145,905

D) $145,905

Stefanovich Corporation makes one product. The company has provided the following information concerning its raw materials needs: The ending raw materials inventory should equal 20% of the following month's raw materials production needs. Each unit of finished goods requires 2 pounds of raw materials. The raw materials cost $3.00 per pound. The company will need 26,440 pounds of raw material to satisfy production needs in March. The raw materials inventory balance at the end of February should be closest to: A) $74,136 B) $14,568 C) $88,704 D) $15,864

D) $15,864

The LFH Corporation makes and sells a single product, Product T. Each unit of Product T requires 1.5 direct labor-hours at a rate of $10.50 per direct labor-hour. The direct labor workforce is fully adjusted each month to the required workload. LFH Corporation needs to prepare a Direct Labor Budget for the second quarter of next year. The budgeted direct labor cost per unit of Product T is closest to: A) $9.10 B) $10.50 C) $7.00 D) $15.75

D) $15.75

Budgeted sales in Acer Corporation over the next four months are given below: September October November December Budgeted sales $120,000 $140,000 $180,000 $160,000 Thirty percent of the company's sales are for cash and 70% are on account. Collections for sales on account follow a stable pattern as follows: 50% of a month's credit sales are collected in the month of sale, 30% are collected in the month following sale, and 20% are collected in the second month following sale. Given these data, cash collections for December should be: A) $141,800 B) $100,500 C) $118,700 D) $161,400

D) $161,400

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $310,000 for November, $330,000 for December, and $230,000 for January. Collections are expected to be 60% in the month of sale and 40% in the month following the sale. The cost of goods sold is 70% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 90% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $23,100. Monthly depreciation is $31,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 36,500 Accounts receivable 87,000 Merchandise inventory 195,300 Property, plant and equipment, net of $624,000 accumulated depreciation 925,000 Total assets $ 1,243,800 Liabilities and Stockholders' Equity Accounts payable $ 259,000 Common stock 760,000 Retained earnings 224,800 Total liabilities and stockholders' equity $ 1,243,800 The cost of December merchandise purchases would be: A) $231,000 B) $217,000 C) $144,900 D) $168,000

D) $168,000

The Puyer Corporation makes and sells only one product called a Deb. The company is in the process of preparing its Selling and Administrative Expense Budget for next year. The following budget data are available: Monthly Fixed Cost Variable Cost Per Deb Sold Sales commissions $ 0.90 Shipping $ 1.40 Advertising $ 50,000 $ 0.20 Executive salaries $ 60,000 Depreciation on office equipment $ 20,000 Other $ 40,000 All of these expenses (except depreciation) are paid in cash in the month they are incurred. If the company has budgeted to sell 15,000 Debs in February, then the total budgeted fixed selling and administrative expenses for February is: A) $120,000 B) $130,000 C) $150,000 D) $170,000

D) $170,000

The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 8,800 direct labor-hours will be required in February. The variable overhead rate is $9.20 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $109,120 per month, which includes depreciation of $18,240. All other fixed manufacturing overhead costs represent current cash flows. The February cash disbursements for manufacturing overhead on the manufacturing overhead budget should be: A) $80,960 B) $190,080 C) $90,880 D) $171,840

D) $171,840

The Puyer Corporation makes and sells only one product called a Deb. The company is in the process of preparing its Selling and Administrative Expense Budget for next year. The following budget data are available: Monthly Fixed Cost Variable Cost Per Deb Sold Sales commissions $ 1.00 Shipping $ 1.50 Advertising $ 51,000 $ 0.30 Executive salaries $ 61,000 Depreciation on office equipment $ 21,000 Other $ 41,000 All of these expenses (except depreciation) are paid in cash in the month they are incurred. If the company has budgeted to sell 16,000 Debs in February, then the total budgeted fixed selling and administrative expenses for February is: A) $123,000 B) $133,000 C) $153,000 D) $174,000

D) $174,000

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January. Collections are expected to be 65% in the month of sale and 35% in the month following the sale. The cost of goods sold is 80% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $21,100. Monthly depreciation is $21,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 25,000 Accounts receivable 77,000 Merchandise inventory 162,400 Property, plant and equipment, net of $624,000 accumulated depreciation 1,026,000 Total assets $ 1,290,400 Liabilities and Stockholders' Equity Accounts payable $ 239,000 Common stock 740,000 Retained earnings 311,400 Total liabilities and stockholders' equity $ 1,290,400 The cost of December merchandise purchases would be: A) $248,000 B) $232,000 C) $117,600 D) $192,000

D) $192,000

Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 2.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows: August 22,600 units September 21,300 units October 22,700 units November 23,900 units December 23,600 units The company wants to maintain monthly ending inventories of Jurislon equal to 20% of the following month's production needs. On July 31, this requirement was not met since only 10,800 kilograms of Jurislon were on hand. The cost of Jurislon is $18.00 per kilogram. The company wants to prepare a Direct Materials Purchase Budget for the next five months. The desired ending inventory of Jurislon for September is: A) $81,720 B) $76,680 C) $191,700 D) $204,300

D) $204,300

The following information relates to Mapfes Manufacturing Corporation for next quarter: January February March Expected sales (in units) 440,000 390,000 380,000 Desired ending finished goods inventory (in units) 39,000 38,000 40,000 How many units should the company plan to produce for the month of February? A) 428,000 units B) 391,000 units C) 390,000 units D) 389,000 units

D) 389,000 units

Schuepfer Incorporated bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 1,300 units are planned to be sold in March. The variable selling and administrative expense is $4.20 per unit. The budgeted fixed selling and administrative expense is $19,240 per month, which includes depreciation of $3,380 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the March selling and administrative expense budget should be: A) $15,860 B) $5,460 C) $24,700 D) $21,320

D) $21,320

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $220,000 for November, $200,000 for December, and $190,000 for January. Collections are expected to be 45% in the month of sale and 55% in the month following the sale. The cost of goods sold is 60% of sales. The company would like to maintain ending merchandise inventories equal to 50% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $22,800. Monthly depreciation is $13,800. Ignore taxes. Balance Sheet October 31 Assets Cash $ 22,400 Accounts receivable 72,400 Merchandise inventory 66,000 Property, plant and equipment, net of $574,400 accumulated depreciation 1,096,400 Total assets $ 1,257,200 Liabilities and Stockholders' Equity Accounts payable $ 256,400 Common stock 822,400 Retained earnings 178,400 Total liabilities and stockholders' equity $ 1,257,200 Expected cash collections in December are: A) $121,000 B) $90,000 C) $200,000 D) $211,000

D) $211,000

The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 9,300 direct labor-hours will be required in February. The variable overhead rate is $8.70 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $124,620 per month, which includes depreciation of $18,280. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for February should be: A) $13.40 per direct labor-hour B) $19.80 per direct labor-hour C) $8.70 per direct labor-hour D) $22.10 per direct labor-hour

D) $22.10 per direct labor-hour

The LaGrange Corporation had the following budgeted sales for the first half of the current year: Cash Sales Credit Sales January $90,000 $190,000 February $95,000 $210,000 March $30,000 $170,000 April $25,000 $110,000 May $35,000 $240,000 June $120,000 $40,000 The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled: Collections on sales: 50% in month of sale 40% in month following sale 10% in second month following sale The accounts receivable balance on January 1 of the current year was $65,000, of which $50,000 represents uncollected December sales and $15,000 represents uncollected November sales. The total cash collected during January by LaGrange Corporation would be: A) $325,000 B) $250,000 C) $100,000 D) $240,000

D) $240,000

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January. Collections are expected to be 80% in the month of sale and 20% in the month following the sale. The cost of goods sold is 75% of sales. The company would like to maintain ending merchandise inventories equal to 60% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $24,000. Monthly depreciation is $15,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 20,000 Accounts receivable 70,000 Merchandise inventory 153,000 Property, plant and equipment, net of $572,000 accumulated depreciation 1,094,000 Total assets $ 1,337,000 Liabilities and Stockholders' Equity Accounts payable $ 254,000 Common stock 820,000 Retained earnings 263,000 Total liabilities and stockholders' equity $ 1,337,000 Expected cash collections in December are: A) $68,000 B) $256,000 C) $320,000 D) $324,000

D) $324,000

The LaGrange Corporation had the following budgeted sales for the first half of the current year: Cash Sales Credit Sales January $70,000 $340,000 February $50,000 $190,000 March $40,000 $135,000 April $35,000 $120,000 May $45,000 $160,000 June $40,000 $140,000 The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled: Collections on sales: 60% in month of sale 30% in month following sale 10% in second month following sale The accounts receivable balance on January 1 of the current year was $70,000, of which $50,000 represents uncollected December sales and $20,000 represents uncollected November sales. The total cash collected during January by LaGrange Corporation would be: A) $410,000 B) $254,000 C) $344,000 D) $331,500

D) $331,500

Depasquale Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.41 direct labor-hours. The direct labor rate is $8.10 per direct labor-hour. The production budget calls for producing 5,000 units in May and 5,400 units in June. If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months? A) $16,605.00 B) $17,933.40 C) $17,269.20 D) $34,538.40

D) $34,538.40

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January. Collections are expected to be 65% in the month of sale and 35% in the month following the sale. The cost of goods sold is 80% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $21,100. Monthly depreciation is $21,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 25,000 Accounts receivable 77,000 Merchandise inventory 162,400 Property, plant and equipment, net of $624,000 accumulated depreciation 1,026,000 Total assets $ 1,290,400 Liabilities and Stockholders' Equity Accounts payable $ 239,000 Common stock 740,000 Retained earnings 311,400 Total liabilities and stockholders' equity $ 1,290,400 Retained earnings at the end of December would be: A) $325,100 B) $311,400 C) $353,400 D) $347,200

D) $347,200

Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 97 Budgeted unit sales (all on credit): January 10,000 February 12,000 March 13,300 April 15,200 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.5 direct labor-hours Direct labor wage rate $ 23.00 per direct laborhour Predetermined overhead rate (all variable) $ 9.00 per direct laborhour Variable selling and administrative expense $ 3.10 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 30% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs. If the budgeted cost of raw materials purchases in February is $50,152, then the budgeted accounts payable balance at the end of

D) $35,106

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? A) $370,000 B) $222,000 C) $119,000 D) $358,000

D) $358,000

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January. Collections are expected to be 65% in the month of sale and 35% in the month following the sale. The cost of goods sold is 80% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $21,100. Monthly depreciation is $21,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 25,000 Accounts receivable 77,000 Merchandise inventory 162,400 Property, plant and equipment, net of $624,000 accumulated depreciation 1,026,000 Total assets $ 1,290,400 Liabilities and Stockholders' Equity Accounts payable $ 239,000 Common stock 740,000 Retained earnings 311,400 Total liabilities and stockholders' equity $ 1,290,400 The difference between cash receipts and cash disbursements for December would be: A) $46,600 B) $19,200 C) $13,700 D) $38,700

D) $38,700

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $299,000 for November, $319,000 for December, and $219,000 for January. Collections are expected to be 65% in the month of sale and 35% in the month following the sale. The cost of goods sold is 80% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $22,000. Monthly depreciation is $25,500. Ignore taxes. Balance Sheet October 31 Assets Cash $ 32,500 Accounts receivable 81,500 Merchandise inventory 167,440 Property, plant and equipment, net of $624,000 accumulated depreciation 1,013,000 Total assets $ 1,294,440 Liabilities and Stockholders' Equity Accounts payable $ 248,000 Common stock 749,000 Retained earnings 297,440 Total liabilities and stockholders' equity $ 1,294,440 The difference between cash receipts and cash disbursements for December would be: A) $28,300 B) $14,100 C) $7,100 D) $39,600

D) $39,600

Kesselring Corporation makes one product and has provided the following information to help prepare the master budget for the next three months of operations: Budgeted unit sales (all on credit): July 8,400 August 8,800 September 12,200 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 3.00 per pound Direct labor requirement per unit of output 2.8 direct labor-hours Direct labor wage rate $ 18.00 per direct labor hour Predetermined overhead rate (all variable) $ 11.00 per direct labor hour The ending finished goods inventory should equal 40% of the following month's sales. The budgeted finished goods inventory balance at the end of August is closest to: A) $358,192 B) $150,304 C) $304,512 D) $454,816

D) $454,816

Porter Corporation makes and sells a single product called a Yute. The company is in the process of preparing its Selling and Administrative Expense Budget for the last quarter of the year. The following budget data are available: Variable Cost Per Monthly Yute Sold Fixed Cost Sales commissions $ 5.90 Shipping $ 5.30 Advertising $ 8.90 $ 32,000 Executive salaries $ 178,000 Depreciation on office equipment $ 7,000 Other $ 0.60 $ 20,000 All of these expenses (except depreciation) are paid in cash in the month they are incurred. If the company has budgeted to sell 12,000 Yutes in December, then the budgeted total cash disbursements for selling and administrative expenses for December would be: A) $237,000 B) $485,400 C) $248,400 D) $478,400

D) $478,400

Marst Corporation's budgeted production in units and budgeted raw materials purchases over the next three months are given below: January February March Budgeted production (in units) 70,400 ?question mark 82,000 Budgeted raw materials purchases (in pounds) 195,009 157,600 160,800 Three pounds of raw materials are required to produce one unit of product. The company wants raw materials on hand at the end of each month equal to 21% of the following month's production needs. The company is expected to have 44,352 pounds of raw materials on hand on January 1. Budgeted production for February should be: A) 105,740 units B) 82,600 units C) 82,000 units D) 44,700 units

D) 44,700 units

Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 97 Budgeted unit sales (all on credit): January 10,000 February 12,000 March 13,300 April 15,200 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.5 direct labor-hours Direct labor wage rate $ 23.00 per direct laborhour Predetermined overhead rate (all variable) $ 9.00 per direct laborhour Variable selling and administrative expense $ 3.10 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 30% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs. If the company estimates that it will need 55,480 pounds of raw material to satisfy production needs in March, then the raw mat

D) $5,548

All of Gaylord Corporation's sales are on account. Thirty-five percent of the sales on account are collected in the month of sale, 45% in the month following sale, and the remainder are collected in the second month following sale. The following are budgeted sales data for the company: January February March April Total sales $50,000 $60,000 $40,000 $30,000 What is the amount of cash that should be collected in March? A) $24,000 B) $37,000 C) $41,000 D) $51,000

D) $51,000

The Bandeiras Corporation, a merchandising firm, has budgeted its activity for December according to the following information: Sales at $550,000, all for cash. Merchandise inventory on November 30 was $300,000. The cash balance at December 1 was $25,000. Selling and administrative expenses are budgeted at $60,000 for December and are paid in cash. Budgeted depreciation for December is $35,000. The planned merchandise inventory on December 31 is $270,000. The cost of goods sold is 75% of the sales price. All purchases are paid for in cash. There is no interest expense or income tax expense. The budgeted cash receipts for December are: A) $412,500 B) $137,500 C) $585,000 D) $550,000

D) $550,000

Depasquale Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.61 direct labor-hours. The direct labor rate is $9.00 per direct labor-hour. The production budget calls for producing 7,000 units in May and 7,400 units in June. If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months? A) $38,430.00 B) $40,626.00 C) $39,528.00 D) $79,056.00

D) $79,056.00

Dustman Manufacturing Corporation's most recent production budget indicates the following required production: January February March April Required production (units) 4,000 6,000 5,500 5,000 Each unit of finished product requires 3 feet of raw materials. The company maintains raw materials inventory equal to 2,000 feet plus 10% of the next month's expected production needs. The raw material used in Dustman Manufacturing Corporation's product costs $4.50 per foot. What is the value of raw material that Dustman Manufacturing should plan to purchase for the month of February? A) $73,575 B) $74,250 C) $81,000 D) $80,325

D) $80,325

Fuson Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 118 Budgeted unit sales (all on credit): October 9,600 November 10,100 December 13,700 January 11,300 Raw materials requirement per unit of output 3 pounds Raw materials cost $ 4.00 per pound Direct labor requirement per unit of output 2.7 direct labor-hours Direct labor wage rate $ 23.00 per direct labor hour Predetermined overhead rate (all variable) $ 12.00 per direct labor hour Credit sales are collected: 30% in the month of the sale 70% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 10% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs. The budgeted accounts receivable balance at the end of November is closest to: A) $795,000 B) $357,540 C) $1,191,800 D) $834,260

D) $834,260

Harrti Corporation has budgeted for the following sales: July $445,000 August $580,000 September $615,000 October $890,000 November $730,000 December $690,000 Sales are collected as follows: 10% in the month of sale; 60% in the month following the sale; and the remaining 30% in the second month following the sale. In Harrti's budgeted balance sheet at December 31, at what amount will accounts receivable be shown? A) $690,000 B) $219,000 C) $621,000 D) $840,000

D) $840,000

Harrti Corporation has budgeted for the following sales: July $446,800 August $581,800 September $615,900 October $890,900 November $739,000 December $699,000 Sales are collected as follows: 10% in the month of sale; 60% in the month following the sale; and the remaining 30% in the second month following the sale. In Harrti's budgeted balance sheet at December 31, at what amount will accounts receivable be shown? A) $699,000 B) $221,700 C) $629,100 D) $850,800

D) $850,800

Sevenbergen Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 92 Budgeted unit sales (all on credit): July 9,000 August 11,300 September 10,400 October 10,800 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.8 direct labor-hours Direct labor wage rate $ 22.00 per direct laborhour Variable selling and administrative expense $ 1.50 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 40% in the month of the sale 60% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 20% of the following month's sales. The ending raw materials inventory should equal 30% of the following month's raw materials production needs. The estimated selling and administrative expense for August is closest to: A) $70,000 B) $57,970 C) $16,950 D) $86,950

D) $86,950

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 is factory depreciation. If the budgeted direct labor time for November is 7,000 hours, then the total budgeted cash disbursements for manufacturing overhead for November must be: A) $41,900 B) $127,900 C) $86,000 D) $97,900

D) $97,900

Sevenbergen Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 92 Budgeted unit sales (all on credit): July 9,000 August 11,300 September 10,400 October 10,800 Raw materials requirement per unit of output 4 pounds Raw materials cost $ 1.00 per pound Direct labor requirement per unit of output 2.8 direct labor-hours Direct labor wage rate $ 22.00 per direct laborhour Variable selling and administrative expense $ 1.50 per unit sold Fixed selling and administrative expense $ 70,000 per month Credit sales are collected: 40% in the month of the sale 60% in the following month Raw materials purchases are paid: 30% in the month of purchase 70% in the following month The ending finished goods inventory should equal 20% of the following month's sales. The ending raw materials inventory should equal 30% of the following month's raw materials production needs. The budgeted required production for August is closest to: A) 15,640 units B) 13,380 units C) 11,300 units D) 11,120 units

D) 11,120 units

Porter Corporation makes and sells a single product called a Yute. The company is in the process of preparing its Selling and Administrative Expense Budget for the last quarter of the year. The following budget data are available: Variable Cost Per Monthly Yute Sold Fixed Cost Sales commissions $ 5.90 Shipping $ 5.30 Advertising $ 8.90 $ 32,000 Executive salaries $ 178,000 Depreciation on office equipment $ 7,000 Other $ 0.60 $ 20,000 All of these expenses (except depreciation) are paid in cash in the month they are incurred. If the total budgeted selling and administrative expense for October is $518,520, then how many Yutes does the company plan to sell in October? A) 13,300 units B) 14,100 units C) 13,800 units D) 13,600 units

D) 13,600 units

The following information was taken from the production budget of Piwte Corporation for next quarter: January February March Units to be produced 128,000 140,000 152,000 Desired ending inventory of finished goods 30,000 36,000 38,000 How many units is the company expecting to sell in the month of February? A) 132,000 B) 138,000 C) 135,000 D) 134,000

D) 134,000

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. If the budgeted direct labor cost for April is $201,600, then the budgeted production of Pods for April would be: A) 21,000 units B) 29,400 units C) 18,273 units D) 15,000 units

D) 15,000 units

The Puyer Corporation makes and sells only one product called a Deb. The company is in the process of preparing its Selling and Administrative Expense Budget for next year. The following budget data are available: Monthly Fixed Cost Variable Cost Per Deb Sold Sales commissions $ 0.90 Shipping $ 1.40 Advertising $ 50,000 $ 0.20 Executive salaries $ 60,000 Depreciation on office equipment $ 20,000 Other $ 40,000 All of these expenses (except depreciation) are paid in cash in the month they are incurred. If the budgeted cash disbursements for selling and administrative expenses for April total $195,500, then how many Debs does the company plan to sell in April? A) 14,400 units B) 8,000 units C) 10,200 units D) 18,200 units

D) 18,200 units

Douglas Corporation plans to sell 24,000 units of Product A during July and 30,000 units during August. Sales of Product A during June were 25,000 units. Past experience has shown that end-of-month inventory should equal 3,000 units plus 30% of the next month's sales. On June 30 this requirement was met. Based on these data, how many units of Product A must be produced during the month of July? A) 28,800 B) 22,200 C) 24,000 D) 25,800

D) 25,800

Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year. Beginning Inventory Ending Inventory Finished goods (units) 20,000 30,000 Raw material (grams) 50,000 40,000 Each unit of finished goods requires 7 grams of raw material. The company plans to sell 270,000 units during the year. The number of units the company would have to manufacture during the year would be: A) 300,000 units B) 270,000 units C) 260,000 units D) 280,000 units

D) 280,000 units

Luchini Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $111. Budgeted unit sales for April, May, June, and July are 7,100, 10,100, 13,300, and 14,000 units, respectively. All sales are on credit. b. Regarding credit sales, 40% are collected in the month of the sale and 60% in the following month. c. The ending finished goods inventory equals 10% of the following month's sales. d. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $5.00 per pound. e. Regarding raw materials purchases, 40% are paid for in the month of purchase and 60% in the following month. f. The direct labor wage rate is $18.00 per hour. Each unit of finished goods requires 2.9 direct labor-hours. g. Variable manufacturing overhead is $7.00 per direct labor-hour. Fixed manufacturing overhead is zero. If 66,850 pounds of raw materials are required for production in June, then the budgeted raw material purchases for May is closest to: A)

D) 56,525 pounds

Michard Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a. The budgeted selling price per unit is $125. Budgeted unit sales for April, May, June, and July are 7,600, 10,500, 13,800, and 12,900 units, respectively. All sales are on credit. b. Regarding credit sales, 20% are collected in the month of the sale and 80% in the following month. c. The ending finished goods inventory equals 20% of the following month's sales. d. The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.00 per pound. e. Regarding raw materials purchases, 30% are paid for in the month of purchase and 70% in the following month. f. The direct labor wage rate is $25.00 per hour. Each unit of finished goods requires 3.0 direct labor-hours. g. The variable selling and administrative expense per unit sold is $3.40. The fixed selling and administrative expense per month is $80,000. If 54,480 pounds of raw materials are required for production in June, then the budgeted raw material p

D) 60,984 pounds

Roberts Enterprises has budgeted sales in units for the next five months as follows: June 4,500 units July 7,100 units August 5,300 units September 6,700 units October 3,700 units Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on May 31 contained 450 units. The company needs to prepare a production budget for the second quarter of the year. The beginning inventory in units for September is: A) 370 units B) 6,700 units C) 530 units D) 670 units

D) 670 units

Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year. Beginning Inventory Ending Inventory Finished goods (units) 28,000 78,000 Raw material (grams) 58,000 48,000 Each unit of finished goods requires 3 grams of raw material. The company plans to sell 630,000 units during the year. The number of units the company would have to manufacture during the year would be: A) 630,000 units B) 708,000 units C) 572,000 units D) 680,000 units

D) 680,000 units

Marst Corporation's budgeted production in units and budgeted raw materials purchases over the next three months are given below: January February March Budgeted production (in units) 70,000 ? 80,000 Budgeted raw materials purchases (in pounds) 142,400 151,600 158,800 Two pounds of raw materials are required to produce one unit of product. The company wants raw materials on hand at the end of each month equal to 30% of the following month's production needs. The company is expected to have 42,000 pounds of raw materials on hand on January 1. Budgeted production for February should be: A) 103,400 units B) 80,600 units C) 80,000 units D) 74,000 units

D) 74,000 units

Coles Corporation, Incorporated makes and sells a single product, Product R. Three yards of Material K are needed to make one unit of Product R. Budgeted production of Product R for the next five months is as follows: August 14,000 units September 14,500 units October 15,500 units November 12,600 units December 11,900 units The company wants to maintain monthly ending inventories of Material K equal to 20% of the following month's production needs. On July 31, this requirement was not met since only 2,500 yards of Material K were on hand. The cost of Material K is $0.85 per yard. The company wants to prepare a Direct Materials Purchase Budget for the rest of the year. The desired ending inventory of Material K for September is: A) 7,560 yards B) 8,400 yards C) 8,700 yards D) 9,300 yards

D) 9,300 yards

Which of the following budgets are prepared before the sales budget? Budgeted Income Statement Direct Labor Budget A) Yes Yes B) Yes No C) No Yes D) No No

D) No No

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