College Acct 2- Chapter 8

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:

• 36,360 pounds

• 71,144 pounds

• 42,056 pounds

• 56,600 pounds

January expected sales: 440,000

January desired ending inventory: 40,000

February expected sales: 400,000

February desired ending inventory: 42,000

March expected sales: 420,000

March desired ending inventory: 40,000

How many units should the company plan on producing for the month of February?

• 390,000 units

• 400,000 units

• 402,000 units

• 420,000 units

Sedita Inc. is working on its cash budget for April. The budgeted beginning cash balance is $32,000. Budgeted cash receipts total $175,000 and budgeted cash disbursements total $164,000. The desired ending cash balance is $50,000. The excess (deficiency) of cash available over disbursements for April will be:

• $45,000

• $43,000

• $7,000

• $221,000

When preparing a direct materials budget, the required purchases of raw materials in units equals:

• raw materials needed to meet the production schedule − desired ending inventory of raw materials − beginning inventory of raw materials.

• raw materials needed to meet the production schedule + desired ending inventory of raw materials + beginning inventory of raw materials.

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

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

Which of the following is typically the first step in creating a master budget?

• the sales forecast or sales budget.

• the cash flow budget.

• the direct labor budget.

• the overhead budget.

Bries Corporation is preparing its cash budget for January. The budgeted beginning cash balance is $20,000. Budgeted cash receipts total $175,000 and budgeted cash disbursements total $190,000. The desired ending cash balance is $30,000.

The excess (deficiency) of cash available over disbursements for January is:

• $5,000

• ($5,000)

• $25,000

• ($25,000)

Arciba Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 7,000 direct labor-hours will be required in January. The variable overhead rate is $7.50 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $140,150 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:

• $27.52

• $17.70

• $25.80

• $9.50

Knappert Corporation makes one product and has provided the following information:

-Each unit of finished goods requires 2 pounds of raw materials. The raw materials cost $4.00 per pound.

-The direct labor wage rate is $18.00 per hour. Each unit of finished goods requires 2.2 direct labor-hours.

-Manufacturing overhead is entirely variable and is $10.00 per direct labor-hour.

-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: (Round your intermediate calculations to 2 decimal places.)

• $73.40

• $30.80

• $69.60

• $93.20

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:

• 5,030 units

• 5,300 units

• 5,570 units

• 6,365 units

Smith Corporation makes and sells a single product called a Pod. Each Pod requires 2.2 direct labor-hours at $10.20 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:

• $11.00

• $22.44

• $10.20

• $7.38