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Exam 8: Master Budgeting

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Question 41

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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: 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

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

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Question 42

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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.

A) True
B) False

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Question 43

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Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:Sales are budgeted at $230,000 for November, $210,000 for December, and $200,000 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 65% of sales.The company would like to maintain ending merchandise inventories equal to 55% 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 $22,900.Monthly depreciation is $13,900.Ignore taxes. The difference between cash receipts and cash disbursements for December would be:

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. Accounts payable at the end of December would be:

LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.3 hours of direct labor at the rate of $19.00 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:

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?

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: Cash receipts in April are expected to be:

Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:Sales are budgeted at $350,000 for November, $370,000 for December, and $360,000 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 69% of sales.The company desires an ending merchandise inventory equal to 80% of the cost of goods sold in the following month.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 $19,900.Ignore taxes. Required: a. Prepare a Schedule of Expected Cash Collections for November and December. b. Prepare a Merchandise Purchases Budget for November and December. c. Prepare Cash Budgets for November and December. d. Prepare Budgeted Income Statements for November and December. e. Prepare a Budgeted Balance Sheet for the end of December.

Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:Sales are budgeted at $330,000 for November, $300,000 for December, and $320,000 for January.Collections are expected to be 85% in the month of sale and 15% in the month following the sale.The cost of goods sold is 60% of sales.The company desires an ending merchandise inventory equal to 80% of the cost of goods sold in the following month.Payment for merchandise is made in the month following the purchase.Other monthly expenses to be paid in cash are $21,200.Monthly depreciation is $21,000.Ignore taxes. Required:a. Prepare a Schedule of Expected Cash Collections for November and December.b. Prepare a Merchandise Purchases Budget for November and December.c. Prepare Cash Budgets for November and December.d. Prepare Budgeted Income Statements for November and December.e. Prepare a Budgeted Balance Sheet for the end of December.

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

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?

Hesterman 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:40% in the month of the sale60% in the following monthThe 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:

Sthilaire Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.33 direct labor-hours. The direct labor rate is $8 per direct labor-hour. The production budget calls for producing 8,600 units in April and 8,500 units in May. The direct labor workforce is fully adjusted each month to the required workload. Required:Prepare the direct labor budget for the next two months. (Round "labor-hours per unit" answers to 2 decimal places.)

KAB Incorporated, 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 amount of cash collected during June should be:

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. The net income for December would be:

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

Petrini Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: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.Regarding credit sales, 30% are collected in the month of the sale and 70% in the following month.The ending finished goods inventory equals 30% 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 5 pounds of raw materials. The raw materials cost $4.00 per pound.Regarding raw materials purchases, 40% are paid for in the month of purchase and 60% in the following month.The direct labor wage rate is $23.00 per hour. Each unit of finished goods requires 2.6 direct labor-hours.Manufacturing overhead is entirely variable and is $8.00 per direct labor-hour.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 accounts receivable balance at the end of February is closest to:

Hesterman 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:40% in the month of the sale60% in the following monthThe 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:

Hesterman 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:40% in the month of the sale60% in the following monthThe 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:

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. The difference between cash receipts and cash disbursements for December would be: