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Meyerhoff Company has the following budgeted sales: July $100,000, August $150,000, and September $125,000. 40% of the sales are for cash and 60% are on credit. For the credit sales, 50% are collected in the month of sale, and 50% the next month. The total expected cash receipts during September are
A $140,000
B $132,500
C $131,250
D $125,000
ANSWER – B $132,500
The total direct labor hours required in preparing a direct labor budget are calculated using the
A Sales forecast
B Production budget
C Direct materials budget
D Sales budget
ANSWER – B Production budget
A company budgeted unit sales of 102,000 units for January, 2010 and 120,000 units for February, 2010. The company has a policy of having an inventory of units on hand at the end of each month equal to 30% of next month’s budgeted unit sales. If there were 30,600 units of inventory on hand on December 31, 2009, how many units should be produced in January, 2010 in order for the company to meet its goals?
A 107,400 units
B 102,000 units
C 96,600 units
D 138,000 units
ANSWER – A. 107,400 units
Flint Company estimates its sales at 120,000 units in the first quarter and that sales will increase by 12,000 units each quarter over the year. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $25. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale. Production in units for the third quarter should be budgeted at
A 147,000
B 138,000
C 183,000
D 144,000
ANSWER – A – 147,000
Nunley Company’s direct materials budget shows total cost of direct materials purchases for April $200,000, May $240,000 and June $280,000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for June are
A $264,000
B $256,000
C $240,000
D $208,000
ANSWER – A $264,000
Davies Nursery plans to sell 160 potted plants during April and 120 units in May. Davies Nursery keeps 15% of the next month’s sales as ending inventory. How many units should Davies Nursery produce during April?
A 154
B 166
C 160
D 178
ANSWER – A 154
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The following information is taken from the production budget for the first quarter:
| Beginning inventory in units | 600 |
| Sales budgeted for the quarter | 228,000 |
| Production capacity in units | 236,200 |
How many finished goods units should be produced during the quarter if the company desires 1,600 units available to start the next quarter?
A 229,000
B 227,000
C 237,000
D 229,600
ANSWER – A 229,000
The financial budgets include the
A Cash budget and the selling and administrative expense budget
B Cash budget and the budgeted balance sheet
C Budgeted balance sheet and the budgeted income statement
D Cash budget and the production budget
ANSWER – B Cash budget and the budgeted balance sheet
Andersen Company required production for June is 66,000 units. To make one unit of finished product, three pounds of direct material Z are required. Actual beginning and desired ending inventories of direct material Z are 150,000 and 165,000 pounds, respectively. How many pounds of direct material Z must be purchased?
A 189,000
B 198,000
C 204,000
D 213,000
ANSWER – D 213,000
Giles Company is preparing its direct labor budget for May. Projections for the month are that 16,700 units are to be produced and that direct labor time is three hours per unit. If the labor cost per hour is $12, what is the total budgeted direct labor cost for May?
A 579,600
B 590,400
C 601,200
D 648,000
ANSWER – C 601,200