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Exam 8: Master Budgeting

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Question 101

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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: 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

E) None of the above
F) A) and B)

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Question 102

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Fiwrt Corporation manufactures and sells stainless steel coffee mugs.Expected mug sales Fiwrt (in units) for the next three months are as follows: Fiwrt likes to maintain a finished goods inventory equal to 30% of the next month's estimated sales.How many mugs should Fiwrt plan on producing during the month of November?

A) 35,400 mugs
B) 26,800 mugs
C) 36,000 mugs
D) 34,300 mugs

E) B) and C)
F) A) and B)

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Question 103

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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:

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:

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.

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:

The LaPann Corporation has obtained the following sales forecast data: 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:

Marty's Merchandise has budgeted sales as follows for the second quarter of the year: 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:

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:

Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: 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 materials inventory balance at the end of February should be closest to:

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. -If the budgeted cost of raw materials purchases in February is $222,180,then the budgeted accounts payable balance at the end of February is closest to:

Roberts Enterprises has budgeted sales in units for the next five months as follows: 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 410 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:

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: o Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January. o Collections are expected to be 80% in the month of sale and 20% in the month following the sale. o The cost of goods sold is 75% of sales. o 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. o Other monthly expenses to be paid in cash are $24,000. o Monthly depreciation is $15,000. o Ignore taxes. -Expected cash collections in December are:

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:

Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: 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:

The Tobler Corporation has budgeted production for next year as follows: 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:

KAB Inc., a small retail store, had the following results for May. The budgets for June and July are also given. 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:

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?

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 budgeted required production for February is closest to:

Roberts Enterprises has budgeted sales in units for the next five months as follows: 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 410 units. The company needs to prepare a production budget for the second quarter of the year. -The beginning inventory in units for September is: