Deck 9: Budgeting, production, cash, and Master Budget

Question 1

Which of the following is an operating budget?

A) the budgeted statement of cash flows
B) the capital expenditures budget
C) the budgeted income statement
D) the cash budget

Answer 1

C

Question 2

Which is NOT a characteristic of the master budget?

A) The sales forecast is prepared before the sales budget.
B) The master budget is the comprehensive plan for the organization as a whole.
C) The production budget is prepared in units and dollars.
D) One approach to forecasting sales is the bottom-up approach.

Answer 2

C

Question 3

What does budgeted operating income include?

A) budgeted interest expense
B) budgeted income taxes
C) budgeted cost of goods sold
D) budgeted net income

Answer 3

C

Question 4

Which is a characteristic of the master budget?

A) It provides a selective financial plan for the organization as a whole.
B) It is typically for a 1-year period corresponding to the fiscal year of the company.
C) It is divided into daily and weekly budgets.
D) It is created externally and imposed on management.

Question 5

A company provided the following information on its projected sales for the coming year: $\begin{array}{lrrrr}& \text { 1st Quarter } & \text { 2nd Quarter } & \text { 3rd Quarter } & \text { 4th Quarter } \\\text { Units } & 50,000 & 40,000 & 30,000 & 80,000 \\\text { Average selling price } & \$ 5 & \$ 5 & \$ 5 & \$ 6\end{array}$ Assume that the beginning inventory is 5,000 units,and that the company policy is to have 25% of the next quarter's sales in ending inventory.Which quarter will have the lowest production?

A) Quarter 1
B) Quarter 2
C) Quarter 3
D) Quarter 4

Question 6

Which budget adds an additional month in the future as one month expires so that the company always has a 12-month plan on hand?

A) a continuous budget
B) a financial budget
C) an operational budget
D) a yearly budget

Question 7

What is the most common starting point in the information-gathering process for budgeting?

A) personnel forecast
B) sales forecast
C) production forecast
D) projected income statement

Question 8

Which budget describes how many units must be made to meet sales needs and ending inventory objectives?

A) production budget
B) direct materials purchases budget
C) cash budget
D) budgeted income statement

Question 9

What is the term for looking backward,determining what actually happened,and comparing what actually happened with the previously planned outcomes?

A) control
B) communicating
C) decision making
D) strategic planning

Question 10

When generating a master budget,what is the schedule created first?

A) production budget
B) direct labour budget
C) cash budget
D) sales budget

Question 11

Which of the following statements depicts an aspect of the master budget?

A) The overhead budget is typically composed exclusively of variable overhead.
B) The direct labour budget uses an average wage rate for direct labour.
C) The production budget is converted into dollars.
D) The sales budget includes not stated both units and dollars.

Question 12

In which order are budgets prepared?

A) production budget,sales budget,direct labour budget
B) production budget,cost of goods sold budget,direct labour budget
C) sales budget,cash budget,production budget
D) sales budget,production budget,direct materials purchases budget

Question 13

Suppose that a company has the following accounts receivable collection pattern: Paid in the month of sale $\quad$$\quad$$\quad$$\quad$$30 \%$
Paid in the month following sale $\quad$$70 \%$ All sales are on credit.Suppose credit sales for March and April are $300,000 and $200,000,respectively.What would be the company's cash collection for April?

A) $100,000
B) $130,000
C) $140,000
D) $270,000

Question 14

Which of the following is characteristic of the master budget?

A) Monthly budgets are derived by dividing the master budget by 12.
B) Fixed costs on the master budget cannot change from one month to another.
C) Variable costs on the master budget cannot change from one month to another.
D) The master budget can reflect seasonal effects.

Question 15

What are future financial plans called?

A) budgets
B) variable costing
C) master plans
D) absorption income

Question 16

Which of the following is a characteristic of budgets?

A) They are key components of recording a financial history.
B) They reflect on financial plans of the past.
C) They are identifiers of objectives and the actions needed to achieve them.
D) They are created once during the life of the business.

Question 17

Which of the following is a result of participative budgeting?

A) pseudoparticipation
B) set goals that are either too high or too low
C) slack built into the budget
D) goal congruence

Question 18

Which of the following is a use of budgets for control?

A) Plans can be made for the future.
B) If conditions change between the formation of the budget and the current time,budgets can be quickly adapted.
C) Budgets set a standard against which results can be compared.
D) Communication is improved.

Question 19

A company expects the following sales for the coming year: $\begin{array}{lrrrr}& \text { 1st Quarter } & \text { 2nd Quarter } & \text { 3rd Quarter } & \text { 4th Quarter } \\\text { Units } & 50,000 & 40,000 & 30,000 & 90,000 \\\text { Average selling price } & \$ 5 & \$ 4.50 & \$ 5 & \$ 6\end{array}$ What is the company's budgeted sales revenue for the year?

A) $1,050,000
B) $1,120,000
C) $1,155,000
D) $1,260,000

Question 20

Who is responsible for directing and coordinating an organization's overall process of budgeting?

A) the controller
B) the chief financial planner
C) the budget director
D) the chief accountant

Question 21

A company plans to sell 450 units.The selling price per unit is $5.The company has 45 units in beginning inventory and would like to have 100 units in ending inventory.How many units should be produced for the coming period?

A) 365
B) 400
C) 505
D) 2,000

Question 22

Sleep Country Company produces and sells pillows.It expects to sell 10,000 pillows the coming year,and it had 1,000 pillows in the finished goods inventory at the end last year.Sleep Country would like to complete operations in the coming year with at least 1,250 completed pillows in inventory.There is no ending work-in-process inventory.The pillows sell for $5 each.How many pillows should be produced in the coming year?

A) 10,000 pillows
B) 10,250 pillows
C) 11,000 pillows
D) 11,250 pillows

Question 23

What does the selling and administrative expenses budget include?

A) cost of goods sold
B) overhead
C) fixed production expense
D) variable cost of commissions

Question 24

Which of the following receives necessary information from the ending finished goods budget?

A) the sales budget
B) the cash budget
C) the budgeted income statement
D) the cost of goods sold budget

Question 25

Adjustments to the sales budget need to be made for which of the following items when going from the sales budget to the production budget?

A) finished goods inventories
B) cash receipts
C) factory overhead costs
D) selling expenses

Question 26

Hoovern Company provided the following data for May: $$\begin{array} { l l } \text { Direct materials } & \$ 60,000 \\\text { Direct labour } & \$ 30,000 \\\text { Overhead } & \$ 80,000 \\\text { Beginning finished goods } & \$ 15,000 \\\text { Ending finished goods } & \$ 34,000 \\\text { Production in units } & 10,000\end{array}$$ What is the cost of goods sold?

A) $75,000
B) $151,000
C) $165,000
D) $184,000

Question 27

BCB Company budgeted 250,000 units for June,240,000 units for July,and 350,000 units for August.Each unit requires 0.35 direct labour hours.How many direct labour hours are budgeted for August?

A) 5,000
B) 50,000
C) 52,500
D) 122,500

Question 28

A company requires 400 kg of plastic to meet the production needs of a product.It currently has 40 kg of plastic inventory.The desired ending inventory of plastic is 120 kg.How many kilograms of plastic should be budgeted for purchasing during the coming period?

A) 160 kg
B) 200 kg
C) 480 kg
D) 520 kg

Question 29

What is the formula to compute the units to be produced?

A) units produced = units sold
B) units produced = units sold + units in beginning inventory + units in ending inventory
C) units produced = units sold + units in beginning inventory − units in ending inventory
D) units produced = units sold − units in beginning inventory + units in ending inventory

Question 30

Bright Lights Company manufactures lamps.The estimated lamp sales for the last three months of the current year are as follows: $$\begin{array} { l r } \text { Month } & \text { Sales } \\\text { October } & 10,000 \\\text { November } & 13,000 \\\text { December } & 15,000\end{array}$$ Finished goods inventory at the end of September was 3,000 units.Ending finished goods inventory is budgeted to equal 25% of the next month's sales.Bright Lights expects to sell the lamps for $25 each.The first three months of the next year's sales are projected at 16,000 lamps.How many lamps should be produced in November?

A) 10,500 lamps
B) 11,000 lamps
C) 13,500 lamps
D) 14,000 lamps

Question 31

A company has had stable sales and production for several years.Next year,sales are expected to increase by at least 50%.Assume that the company maintains its policy for desired ending inventories of finished product and direct materials purchases.What will be the likely effect on the desired ending inventory of finished product?

A) It will increase.
B) It will decrease.
C) It will stay the same.
D) It will be twice the size of the desired ending inventory of raw materials.

Question 32

What budget shows depreciation expenses on sales equipment in a separate line?

A) the cash budget
B) the selling and administrative expense budget
C) the production budget
D) the overhead budget

Question 33

Boxes R Us Corporation manufactures boxes.The estimated number of boxes sold for the first three months of the year is as follows: $$\begin{array} { l l } \text { Month } & \text { Sales } \\\text { January } & 3,000 \\\text { February } & 4,200 \\\text { March } & 3,900\end{array}$$ Finished goods inventory at the end of December was 900 units.Ending finished goods inventory is equal to 20% of the next month's sales.Boxes R Us Corporation expects to sell the boxes for $5 each.April sales are projected at 4,500 boxes.How many boxes should be produced in February?

A) 3,900 boxes
B) 4,140 boxes
C) 4,200 boxes
D) 4,260 boxes

Question 34

For which of the following organizations is having a production budget most important?

A) retail stores
B) manufacturing firms
C) not-for-profit agencies
D) local government agencies

Question 35

A company has provided a sales budget for the next four months (January,February,March,and April).It bases its production budget on the sales budget.According to company policy,each month's ending inventory of finished product must be equal to 25% of the following month's sales needs.The direct materials purchases budget is based on the production budget.Company policy states that each month's ending inventory of raw materials must be equal to 10% of the following month's production needs for raw materials.For how many months can the company prepare direct materials purchases budgets?

A) one month
B) two months
C) three months
D) four months

Question 36

What budgets are needed to calculate a budgeted unit cost?

A) direct materials purchases budget,selling and administration budget,finished goods budget
B) budgeted income statement,direct labour budget,and cash budget
C) budgeted balance sheet,selling and administration budget,and finished goods budget
D) direct materials purchases budget,direct labour budget,and overhead budget

Question 37

Which of the following do many companies use when preparing the overhead budget?

A) activity-based costing
B) multiple drivers for a simple budget
C) participative costing
D) a unit-based driver such as direct labour hours

Question 38

What calculation is used when budgeting direct labour hours for the coming year?

A) Multiply production in units by the direct labour hours per unit.
B) Divide production in units by the direct labour hours per unit.
C) Subtract production in units from the direct labour hours per unit.
D) Subtract direct labour hours per unit from production in units.

Question 39

What is the calculation for the direct materials needed for production?

A) Multiply units to be produced by direct materials per unit.
B) Subtract units to be produced from direct materials per unit.
C) Divide units to be produced by direct materials per unit.
D) Add units to be produced to direct materials per unit.

Question 40

Barkin Company budgeted the following sales in units: $$\begin{array} { l l } \text { April } & 50,000 \\\text { May } & 20,000 \\\text { June } & 40,000\end{array}$$ Barkin's policy is to have 20% of the following month's sales in inventory.On April 1,inventory equalled 10,000 units.What is May's production in units?

A) 20,000
B) 24,000
C) 26,500
D) 28,000

Question 41

Which of the following occurs when a manager deliberately underestimates revenues or overestimates costs?

A) budgetary slack
B) pseudoparticipation
C) goal congruence
D) setting standards too high

Question 42

Which of the following does traditional organization theory use to motivate workers?

A) bonuses
B) self-esteem
C) the nature of the work itself
D) increased responsibility

Question 43

Hillbrant Company purchased $40,000 of goods in July and expects to purchase $60,000 of goods in August.Hillbrant typically pays for 25% of purchases in the month of purchase and 75% in the following month.What total expected cash disbursements for purchases should Hillbrant Company expect to pay in August?

A) $40,000
B) $45,000
C) $60,000
D) $65,000

Question 44

Which of the following budgets would be most important to bank loan officers when determining whether to give a company a loan?

A) sales budget
B) cash budget
C) budgeted income statement
D) budgeted balance sheet

Question 45

Which of the following is NOT an advantage of participative budgeting?

A) It fosters a sense of creativity in managers.
B) It encourages the introduction of budgetary slack.
C) It encourages greater goal congruence.
D) It encourages a higher level of performance.

Question 46

Which of the following is the alignment of managerial and organizational goals?

A) goal congruence
B) goal participation
C) goal pseudoparticipation
D) goal feedback

Question 47

Which action would management take if the company anticipates selling $200,000 of goods,of which $20,000 will probably be uncollectible?

A) They would not include the $20,000 in the cash budget.
B) They would subtract $20,000 from the cash budget.
C) They would include $180,000 as a disbursement in the cash budget.
D) They would add $220,000 to the cash budget.

Question 48

Sessional Company finds that typically 30% of a month's sales are paid in cash.Payments on accounts receivable are 60% in the month of sale and 38% in the month following sale.Budgeted sales for June are $100,000,for July are $140,000,and for August are $120,000.What are the total cash receipts budgeted for July?

A) $85,400
B) $122,000
C) $127,400
D) $140,000

Question 49

$$\begin{array} { l l } \text { January } & 30,000 \\\text { February } & 20,000 \\\text { March } & 40,000\end{array}$$

-Refer to the Figure.What was the ending inventory for January in kilograms?

A) 3,000 kg
B) 4,000 kg
C) 6,000 kg
D) 12,000 kg

Question 50

Kneeling Corporation has the following sales forecasts for the first three months of the current year: $$\begin{array} { l r } \text { Month } & \text { Sales } \\\text { January } & \$ 36,000 \\\text { February } & 24,000 \\\text { March } & 40,000\end{array}$$ In the month of the sale 65% of sales are collected,and the remainder is collected in the following month. $$\begin{array} { l r } \text { Accounts receivable balance (January 1) } & \$ 22,800 \\\text { Cash balance (January 1) } & 30,000 \\\text { Minimum cash balance needed } & 20,000\end{array}$$ What is the cash balance at the end of January,assuming that cash is received only from customers and that $48,000 is paid out during January?

A) $19,400
B) $20,200
C) $20,600
D) $28,200

Question 51

follows: $\begin{array}{lll}&\text { X Brand } & \text { Y Brand }\\\text { May } & 10,000 & 40,000 \\\text { June } & 20,000 & 70,000 \\\text { July } & 15,000 & 80,000 \\\text { August } & 30,000 & 90,000\end{array}$ Shortie's ending inventory policy is that X Brand should have 10% of its next month's sales in ending inventory and Y Brand should have 20% of next month's sales in its ending inventory.On May 1,Shortie's inventory had 1,000 units of X Brand and 9,000 units of Y Brand.Y Brand requires four units of component A.(X Brand does not use component A.)On May 1,2,100 units of component A were in inventory.Shortie wants to have 30% of the following month's production needs in inventory for component A.

-Refer to the Figure.How many units of Y Brand are budgeted for production in June?

A) 45,000
B) 64,000
C) 70,000
D) 72,000

Question 52

The following forecasted sales pertain to Nyak Company: $$\begin{array} { l r } \text { Month } & \text { Sales } \\\text { April } & \$ 200,000 \\\text { May } & 250,000 \\\text { June } & 150,000 \\\text { July } & 100,000\end{array}$$ Collection pattern: 60% in month of sale
40% in month following the sale Accounts receivable as of March 31 $\quad$$\quad$$\quad$ $35,000
Finished goods inventory as of March 31 $\quad$$\quad$ 4,000 units The company has a selling price of $10 per unit and expects to maintain ending inventories equal to 20% of the next month's sales.How many units are expected to be produced in April?

A) 19,000 units
B) 20,000 units
C) 21,000 units
D) 25,000 units

Question 53

Which of the following appears on the budgeted balance sheet?

A) estimated sales
B) estimated cost of goods sold
C) estimated ending accounts receivable
D) estimated fixed selling expense

Question 54

Which of the following is an example of myopic behaviour?

A) promotion of deserving employees
B) reducing expenditures on preventive maintenance
C) increased spending on research and development
D) productivity training for new employees

Question 55

What budget shows a company's planned borrowings and repayments?

A) the production budget
B) the selling and administrative expense budget
C) the interest income budget
D) the cash budget

Question 56

Which statement best depicts the master budget?

A) The production budget is the first budget to be prepared in the master budget.
B) The cash budget is prepared before the direct materials purchases budget.
C) The budgeted balance sheet is prepared after the cash budget.
D) Service firms need not prepare a master budget.

Question 57

Treetop Company,an importer and retailer of pottery and kitchenware,prepares a monthly master budget.Data for the July master budget are given below: The June 30 balance sheet follows: $$\begin{array} { l c r } \text { Cash } & \$ 25,000& \text { Accounts payable } & \$ 45,000 \\\text { Accounts receivable } & 110,000& \text { Capital stock } & 300,000 \\\text { Inventory } & 54,000& \text { Retained earnings } & 94,000 \\\text { Buil ding and equipment (net) } & 250,000 &\end{array}$$ Actual sales for June and budgeted sales for July,August,and September are given below: $$\begin{array} { l r } \text { June } & \$ 137,500 \\\text { July } & 360,000 \\\text { August } & 400,000 \\\text { September } & 320,000\end{array}$$ Sales are 20% in cash and 80% on credit.All credit sales are collected in the month following the sale.There are no bad debts.
The gross margin percentage is 40% of sales.The desired ending inventory is equal to 25% of the following month's sales.One-fourth of the purchases are paid for in the month of purchase,and the others are purchased on account and paid in full the following month.
The monthly cash operating expenses are $43,000,and the monthly depreciation expenses are $7,000.
What is the balance of the accounts receivable at the end of July?

A) $110,000
B) $288,000
C) $360,000
D) $398,000

Question 58

Which of the following schedules shows the planned ending cash balance for the year?

A) the budgeted income statement
B) the budgeted balance sheet
C) the production budget
D) the budgeted cash receipts

Question 59

$$\begin{array} { l l } \text { January } & 30,000 \\\text { February } & 20,000 \\\text { March } & 40,000\end{array}$$

-Refer to the Figure.How many kilograms of raw materials purchases were budgeted for in February?

A) 30,000 kg
B) 32,000 kg
C) 54,000 kg
D) 72,000 kg

Question 60

A company has the following accounts receivable payment history: $\begin{array}{ll}\text { Paid in the month of sale } & 10 \% \\\text { Paid in the month following sale } & 30 \% \\\text { Paid in the second month following sale } & 40 \% \\\text { Paid in the third month following sale } & 10 \%\end{array}$ Which of the following actions might increase the cash receipts over the coming year?

A) allowing customers longer to pay their accounts receivable balances
B) turning uncollectible accounts over to a collection agency with a proven history of success
C) giving a cash discount to customers who pay in the month of sale
D) decreasing the price of the products sold by the company

Question 61

$\begin{array}{lr}\text { Percent paid in the month of sale } & 18 \% \\\text { Percent paid in the month after the sale } & 77 \% \\\text { Percent paid in the second month after the sale } & 3 \%\end{array}$ Doitall provided information on sales as follows: $$\begin{array} { l l } \text { September } & \$ 120,000 \\\text { October } & \$ 150,000 \\\text { November } & \$ 220,000 \\\text { December (expected) } & \$ 250,000\end{array}$$

-Refer to the Figure.What are the expected cash receipts for November?

A) $40,000
B) $190,000
C) $114,000
D) $158,700

Question 62

$$\begin{array} { l l } \text { May } & 20,000 \\\text { June } & 30,000 \\\text { July } & 35,000\end{array}$$ Each bowl requires 45 minutes of direct labour time.Direct labour wages average $20 per hour.Monthly overhead averages $4 per direct labour hour plus fixed overhead of $2,100.

-Refer to the Figure.What is the total overhead budgeted for the month of June?

A) $42,100
B) $80,000
C) $92,100
D) $160,000

Question 63

$$\begin{array} { l r r } \text { Rent } & \$ 5,000 \\\text { Wages } & \$ 14,000 \\\text { Utilities } & \$ 3,000 \\\text { Telephone } & \$ 400 \\\text { Loan on equipment } & \$ 1,200\end{array}$$

-Refer to the Figure.What are the total cash disbursements expected by Garden during the month of July?

A) $55,600
B) $60,100
C) $161,600
D) $167,600

Question 64

follows: $\begin{array}{lll}&\text { X Brand } & \text { Y Brand }\\\text { May } & 10,000 & 40,000 \\\text { June } & 20,000 & 70,000 \\\text { July } & 15,000 & 80,000 \\\text { August } & 30,000 & 90,000\end{array}$ Shortie's ending inventory policy is that X Brand should have 10% of its next month's sales in ending inventory and Y Brand should have 20% of next month's sales in its ending inventory.On May 1,Shortie's inventory had 1,000 units of X Brand and 9,000 units of Y Brand.Y Brand requires four units of component A.(X Brand does not use component A.)On May 1,2,100 units of component A were in inventory.Shortie wants to have 30% of the following month's production needs in inventory for component A.

-Refer to the Figure.How many units of X Brand are budgeted for production in May?

A) 10,000
B) 11,000
C) 12,000
D) 13,000

Question 65

$$\begin{array} { l l } \text { May } & 20,000 \\\text { June } & 30,000 \\\text { July } & 35,000\end{array}$$ Each bowl requires 45 minutes of direct labour time.Direct labour wages average $20 per hour.Monthly overhead averages $4 per direct labour hour plus fixed overhead of $2,100.

-Refer to the Figure.How many units are budgeted for production in March?

A) 100,000
B) 107,600
C) 121,000
D) 140,000

Question 66

$$\begin{array} { l l } \text { May } & 20,000 \\\text { June } & 30,000 \\\text { July } & 35,000\end{array}$$ Each bowl requires 45 minutes of direct labour time.Direct labour wages average $20 per hour.Monthly overhead averages $4 per direct labour hour plus fixed overhead of $2,100.

-Refer to the Figure.What was the gross profit for Bingimton Company last month?

A) $2,400
B) $7,400
C) $9,400
D) $14,600

Question 67

$$\begin{array} { l l } \text { May } & 20,000 \\\text { June } & 30,000 \\\text { July } & 35,000\end{array}$$ Each bowl requires 45 minutes of direct labour time.Direct labour wages average $20 per hour.Monthly overhead averages $4 per direct labour hour plus fixed overhead of $2,100.

-Refer to the Figure.What was the operating income for Bingimton Company last month?

A) $2,400
B) $7,400
C) $9,400
D) $14,600

Question 68

$$\begin{array} { l l } \text { May } & 20,000 \\\text { June } & 30,000 \\\text { July } & 35,000\end{array}$$ Each bowl requires 45 minutes of direct labour time.Direct labour wages average $20 per hour.Monthly overhead averages $4 per direct labour hour plus fixed overhead of $2,100.

-Refer to the Figure.What is the direct labour cost budgeted for March?

A) $26,900
B) $107,600
C) $322,800
D) $538,000

Question 69

$$\begin{array} { l r r } \text { Rent } & \$ 5,000 \\\text { Wages } & \$ 14,000 \\\text { Utilities } & \$ 3,000 \\\text { Telephone } & \$ 400 \\\text { Loan on equipment } & \$ 1,200\end{array}$$

-Refer to the Figure.What is Garden's expected cash disbursement in July to pay for purchases of goods?

A) $26,000
B) $112,000
C) $130,000
D) $138,000

Question 70

$$\begin{array} { l l } \text { July } & 80,000 \\\text { August } & 90,000 \\\text { September } & 70,000\end{array}$$ Each jar requires 0.25 kg of peppers.Southern Inc.prefers to buy the freshest peppers,so its policy is to have just 5% of the following month's production needs in ending inventory.On July 1,the company had 1,200 kg of peppers in inventory.Southern Inc.pays $0.40 per kilogram of peppers.It buys all peppers on account and typically pays 50% of a month's purchases in that month,and the remaining 50% the following month.

-Refer to the Figure.How many kilograms of peppers will be purchased during the month of August?

A) 19,925
B) 21,950
C) 22,250
D) 23,375

Question 71

follows: $\begin{array}{lll}&\text { X Brand } & \text { Y Brand }\\\text { May } & 10,000 & 40,000 \\\text { June } & 20,000 & 70,000 \\\text { July } & 15,000 & 80,000 \\\text { August } & 30,000 & 90,000\end{array}$ Shortie's ending inventory policy is that X Brand should have 10% of its next month's sales in ending inventory and Y Brand should have 20% of next month's sales in its ending inventory.On May 1,Shortie's inventory had 1,000 units of X Brand and 9,000 units of Y Brand.Y Brand requires four units of component A.(X Brand does not use component A.)On May 1,2,100 units of component A were in inventory.Shortie wants to have 30% of the following month's production needs in inventory for component A.

-Refer to the Figure.What is the desired ending inventory of component A for May?

A) 2,100
B) 58,500
C) 86,000
D) 86,400

Question 72

$$\begin{array} { l l } \text { July } & 80,000 \\\text { August } & 90,000 \\\text { September } & 70,000\end{array}$$ Each jar requires 0.25 kg of peppers.Southern Inc.prefers to buy the freshest peppers,so its policy is to have just 5% of the following month's production needs in ending inventory.On July 1,the company had 1,200 kg of peppers in inventory.Southern Inc.pays $0.40 per kilogram of peppers.It buys all peppers on account and typically pays 50% of a month's purchases in that month,and the remaining 50% the following month.

-Refer to the Figure.What is the cost in dollars of purchases for July?

A) $7,970
B) $8,450
C) $19,925
D) $33,320

Question 73

Percent paid in the month of sale
$30 \%$
Percent paid in the month after the sale
$60 \%$
Percent paid in the second month after the sale
$8 \%$ Miso provided information on sales as follows: $$\begin{array} { l l } \text { May } & \$ 100,000 \\\text { June } & \$ 120,000 \\\text { July } & \$ 130,000 \\\text { August (expected) } & \$ 150,000\end{array}$$

-Refer to the Figure.What dollar value of June credit sales is expected to be collected in July?

A) $30,000
B) $36,000
C) $60,000
D) $72,000

Question 74

$$\begin{array} { l l } \text { May } & 20,000 \\\text { June } & 30,000 \\\text { July } & 35,000\end{array}$$ Each bowl requires 45 minutes of direct labour time.Direct labour wages average $20 per hour.Monthly overhead averages $4 per direct labour hour plus fixed overhead of $2,100.

-Refer to the Figure.What is the direct labour cost budgeted for June?

A) $20,000
B) $40,000
C) $150,000
D) $450,000

Question 75

$$\begin{array} { l l } \text { May } & 20,000 \\\text { June } & 30,000 \\\text { July } & 35,000\end{array}$$ Each bowl requires 45 minutes of direct labour time.Direct labour wages average $20 per hour.Monthly overhead averages $4 per direct labour hour plus fixed overhead of $2,100.

-Refer to the Figure.What is Bingimton cost of goods sold per unit?

A) $12.60
B) $14.60
C) $16.60
D) $18.00

Question 76

Percent paid in the month of sale
$30 \%$
Percent paid in the month after the sale
$60 \%$
Percent paid in the second month after the sale
$8 \%$ Miso provided information on sales as follows: $$\begin{array} { l l } \text { May } & \$ 100,000 \\\text { June } & \$ 120,000 \\\text { July } & \$ 130,000 \\\text { August (expected) } & \$ 150,000\end{array}$$

-Refer to the Figure.What dollar value of May's sales is expected to be uncollectible?

A) $0
B) $2,000
C) $2,500
D) $7,200

Question 77

Percent paid in the month of sale
$30 \%$
Percent paid in the month after the sale
$60 \%$
Percent paid in the second month after the sale
$8 \%$ Miso provided information on sales as follows: $$\begin{array} { l l } \text { May } & \$ 100,000 \\\text { June } & \$ 120,000 \\\text { July } & \$ 130,000 \\\text { August (expected) } & \$ 150,000\end{array}$$

-Refer to the Figure.What cash is budgeted to be collected on account in August?

A) $45,000
B) $54,600
C) $132,000
D) $132,600

Question 78

$\begin{array}{lr}\text { Percent paid in the month of sale } & 18 \% \\\text { Percent paid in the month after the sale } & 77 \% \\\text { Percent paid in the second month after the sale } & 3 \%\end{array}$ Doitall provided information on sales as follows: $$\begin{array} { l l } \text { September } & \$ 120,000 \\\text { October } & \$ 150,000 \\\text { November } & \$ 220,000 \\\text { December (expected) } & \$ 250,000\end{array}$$

-Refer to the Figure.What are the expected cash receipts for December?

A) $50,000
B) $179,000
C) $218,900
D) $250,000

Question 79

follows: $\begin{array}{lll}&\text { X Brand } & \text { Y Brand }\\\text { May } & 10,000 & 40,000 \\\text { June } & 20,000 & 70,000 \\\text { July } & 15,000 & 80,000 \\\text { August } & 30,000 & 90,000\end{array}$ Shortie's ending inventory policy is that X Brand should have 10% of its next month's sales in ending inventory and Y Brand should have 20% of next month's sales in its ending inventory.On May 1,Shortie's inventory had 1,000 units of X Brand and 9,000 units of Y Brand.Y Brand requires four units of component A.(X Brand does not use component A.)On May 1,2,100 units of component A were in inventory.Shortie wants to have 30% of the following month's production needs in inventory for component A.

-Refer to the Figure.How many units of component A are budgeted to be purchased in May?

A) 64,500
B) 66,600
C) 180,000
D) 264,300

Question 80

$$\begin{array} { l l } \text { May } & 20,000 \\\text { June } & 30,000 \\\text { July } & 35,000\end{array}$$ Each bowl requires 45 minutes of direct labour time.Direct labour wages average $20 per hour.Monthly overhead averages $4 per direct labour hour plus fixed overhead of $2,100.

-Refer to the Figure.What is the budgeted overhead for March?

A) $44,500
B) $48,420
C) $80,700
D) $125,200