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Exam 8: Master Budgeting

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Question 111

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If the company estimates that it will need 59,550 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:

A) $23,820
B) $222,180
C) $22,040
D) $244,220

E) A) and D)
F) A) and C)

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Question 112

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Brinso Supply Corporation manufactures and sells cotton gauze.Expected sales of gauze (in boxes)for upcoming months are as follows: Management likes to maintain a finished goods inventory equal to 10% of the next month's estimated sales. Required: Prepare the company's production budget for the third quarter of this year (the months of July, August and September).Include a column for each month and a total column for the entire quarter.

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Question 113

Multiple Choice

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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 continuous or perpetual budget is a 12-month budget that rolls forward one month (or quarter)as the current month (or quarter)is completed.

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?

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:

The following are budgeted data: 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:

The estimated finished goods inventory balance at the end of February is closest to:

If 54,480 pounds of raw materials are required for production in June, then the budgeted cost of raw material purchases for May is closest to:

Capes Corporation is a wholesaler of industrial goods.Data regarding the store's operations follow: o Sales are budgeted at $390,000 for November, $360,000 for December, and $340,000 for January. o Collections are expected to be 85% in the month of sale and 15% in the month following the sale. o The cost of goods sold is 80% of sales. o The company desires an ending merchandise inventory equal to 40% of the cost of goods sold in the following month.Payment for merchandise is made in the month following the purchase. o The November beginning balance in the accounts receivable account is $77,000. o The November beginning balance in the accounts payable account is $320,000. Required: a.Prepare a Schedule of Expected Cash Collections for November and December. b.Prepare a Merchandise Purchases Budget for November and December.

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 disbursements for raw materials purchases is closest to:

The budgeted accounts receivable balance on September 30 would be:

Zolezzi Inc.is preparing its cash budget for March.The budgeted beginning cash balance is $42,000.Budgeted cash receipts total $178,000 and budgeted cash disbursements total $175,000.The desired ending cash balance is $50,000.The company can borrow up to $160,000 at any time from a local bank, with interest not due until the following month. Required: Prepare the company's cash budget for March in good form.Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance.

The budgeted sales for May is closest to:

Harrti Corporation has budgeted for the following sales: 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 Razz's budgeted balance sheet at December 31, at what amount will accounts receivable be shown?

The budgeted accounts receivable balance at the end of February is closest to:

December cash disbursements for merchandise purchases would be:

The beginning inventory in units for September is:

Romeiro Corporation is preparing its cash budget for September.The budgeted beginning cash balance is $46,000.Budgeted cash receipts total $160,000 and budgeted cash disbursements total $152,000.The desired ending cash balance is $70,000.The company can borrow up to $120,000 at any time from a local bank, with interest not due until the following month. Required: Prepare the company's cash budget for September in good form.

Mumbower 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 sale 60% in the following month Raw materials purchases are paid: 40% in the month of purchase 60% 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 40% of the following month's raw materials production needs. Required: a.What are the budgeted sales for November? b.What are the expected cash collections for November? c.What is the budgeted accounts receivable balance at the end of November? d.According to the production budget, how many units should be produced in November? e.If 40,000 pounds of raw materials are needed for production in December, how many pounds of raw materials should be purchased in November? f.What is the estimated cost of raw materials purchases for November? g.If the cost of raw material purchases in October is $201,040, then in November what are the total estimated cash disbursements for raw materials purchases? h.What is the estimated accounts payable balance at the end of November? i.What is the estimated raw materials inventory balance at the end of November? j.What is the total estimated direct labor cost for November assuming the direct labor workforce is adjusted to match the hours required to produce the forecasted number of units produced? k.For simplicity, we will assume that there is no fixed manufacturing overhead and that the variable manufacturing overhead is $7.00 per direct labor-hour.What is the estimated unit product cost? l.What is the estimated finished goods inventory balance at the end of November? m.What is the estimated cost of goods sold and gross margin for November? n.What is the estimated total selling and administrative expense for November? o.What is the estimated net operating income for November?