Deck 6: Master Budget and Responsibility Accounting

Question 1

Winnie and Pooh have just purchased a small honey manufacturing company that was having financial difficulties. After a brief operating period, they decided that the company's main problem was lack of any financial planning. The company made a good product and market potential was great.
Required:
Explain why a company needs a good budgeting plan. Specifically address the need for a master budget.

Answer 1

The master budget is a series of interrelated budgets that quantify management's expectations about a company's revenues, expenses, net income, cash flows, and financial position. As the culmination of the planning process, it provides the basis for:
1. reassessing the company's objectives,
2. coordinating the activities of various segments of the organization,
3. communicating management's plans throughout the organization, and
4. evaluating employee performance.

Question 2

A limitation of comparing a company's performance against actual results of last year is that

A) it includes adjustments for future conditions.
B) feedback is no longer a possibility.
C) the benchmark may be unrealistic.
D) past results can contain inefficiencies of the past year.
E) the budgeting time period is set at one year.

Answer 2

D

Question 3

Long-run planning (strategic plans) involves the preparation of the

A) operating budget.
B) cash budget.
C) budget standards.
D) profit plan.
E) capital budget.

Answer 3

E

Question 4

Benchmarks encourage the setting of stretch goals.

Question 5

The budget constraint describes only financial limitations that are within the company's control.

Question 6

Budgets can play both planning and control roles for management.

Question 7

A master budget

A) includes only financial aspects of a plan and excludes nonfinancial aspects.
B) is an aid to coordinating what needs to be done to implement a plan.
C) includes broad expectations and visionary results.
D) should not be altered after it has been agreed upon.
E) is based upon budget constraints outside of management control.

Question 8

Strategic analysis is the

A) comparison of how well an operating budget meets the overall organizational objectives.
B) investigation of external factors that may affect production.
C) evaluation of how well the organization has combined its own capabilities with the relevant features of the competitive environment.
D) analysis of organizational and financial structures of the company.
E) development of contingency plans.

Question 9

Planning the performance of the organization, providing a frame of reference, and investigating variances are part of the

A) budgetary cycle.
B) cash budget.
C) financing budget.
D) master budget.
E) production budget.

Question 10

A budget is limited in that it can only cover financial aspects of plans.

Question 11

Budgeted financial statements are also referred to as pro forma statements.

Question 12

Stretch goals in budgeting tend to

A) decrease line-management participation in attaining corporate goals.
B) increase failure.
C) increase anxiety without motivation.
D) motivate improved performance beyond the status quo.
E) improve communication and coordination.

Question 13

Budgeting is done in place of "strategic analysis."

Question 14

The master budget embraces the impact of

A) operating and managerial decisions.
B) operating and financing decisions.
C) financing and managerial decisions.
D) operating, managerial, and financing decisions.
E) the differences between the budget and the actual costs, for a given cycle.

Question 15

Management at all levels should understand and support the budget and all aspects of the management control system.

Question 16

The process of getting a company's objectives understood and accepted by all departments and functions is known as

A) communication.
B) compilation.
C) continuity.
D) coordination.
E) administration.

Question 17

It is best to compare this year's performance with last year's actual performance rather than this year's budget.

Question 18

A budget is a quantitative expression for a set time period of a proposed future plan of action by management.

Question 19

The master budget embraces the impact of both operating decisions and financing decisions as related to acquisitions and uses of scarce resources.

Question 20

Budgets are advantageous because they

A) compel planning that includes the implementation of plans, provide performance criteria, and promote goodwill.
B) provide performance criteria, promote goodwill, and save money.
C) compel planning that includes the implementation of plans, provide performance criteria, and promote communication and coordination within the organization.
D) compel planning that includes the implementation of plans, require organizing, and ensure controlling.
E) ensure that the organization meets its goals.

Question 21

Manufacturing overhead costs for the budget include

A) factory utility costs.
B) direct materials and supervision.
C) direct labour and direct materials.
D) sales supervisors' salaries.
E) direct labour and indirect labour.

Question 22

The actual data resulting from a strategy should be compared to budgeted results.

Question 23

Clare's Bears manufactures stuffed bears. The company updates it annual budget every month in order to force management to think about the forthcoming 12 months and not just the current budget. This is an example of a

A) master budget.
B) moving budget.
C) target budget.
D) timing budget.
E) rolling budget.

Question 24

Direct material purchases equal

A) usage plus production needs.
B) production needs plus target ending inventories.
C) beginning inventories plus production needs.
D) usage plus target ending inventories less beginning inventories.
E) the number of units to be produced times the amount of direct material in each unit.

Question 25

What will be Berry's Boxes budgeted revenue?

A) $54,000
B) $60,000
C) $78,000
D) $79,500
E) $72,000

Question 26

The production budget of a manufacturing company is prepared after the revenue budget.

Question 27

Budgets that change (rolling or continuous) are better for the planning than budgets that do not change.

Question 28

The financial budget is that part of the master budget that comprises

A) the capital budget and the cash budget.
B) the capital budget and the budgeted balance sheet.
C) the cash budget, operating budget and budgeted balance sheet.
D) the cash budget, the budgeted statement of cash flows, and the retained earnings budget.
E) the capital budget, the cash budget, budgeted balance sheet, and the budgeted statement of cash flows.

Question 29

A rolling budget encourages management to be thinking about the next 12 months.

Question 30

The first three schedules to complete when preparing the master operating budget are the

A) revenue budget, production budget, and direct materials purchases and usage budget.
B) costs of goods sold budget, production budget, and cash budget.
C) revenue budget, overhead budget, and production budget.
D) revenue budget, cash inflows, and production expenditures.
E) revenue budget, costs of goods sold budget, and production budget.

Question 31

Randy Company has budgeted sales of 12,000 units, target ending finished good inventory of 2,000 units, and a beginning finished goods inventory of 600 units. How many units should be produced?

A) 14,600 units
B) 13,400 units
C) 10,600 units
D) 9,400 units
E) 7,250 units

Question 32

Cooper Company has a production schedule of 18,000 units and a budgeted sales volume of 20,000 units for the current year. In addition, 4,000 units are in beginning finished goods inventory. How many units are targeted for ending finished goods inventory?

A) 20,000 units
B) 14,000 units
C) 6,000 units
D) 2,000 units
E) 1,900 units

Question 33

The revenue budget and the budgeted income statement are used to prepare the budgeted balance sheet and the budgeted statement of cash flows.

Question 34

The direct materials usage budget is based on

A) the units to be produced during a period.
B) budgeted sales dollars.
C) the predetermined factory overhead rate.
D) the amount of labour hours worked.
E) direct materials purchases.

Question 35

Budgetary slack is automatically included in the revenue budget.

Question 36

The usual starting point in budgeting is to forecast net income.

Question 37

A production budget expressed in units is equal to

A) budgeted sales plus beginning finished goods inventory plus targeted ending finished goods inventory.
B) budgeted sales less beginning finished goods inventory less targeted ending finished goods inventory.
C) budgeted sales less beginning finished goods inventory plus targeted ending finished goods inventory.
D) budgeted sales plus beginning finished goods inventory less targeted ending finished goods inventory.
E) last year's sales plus beginning finished goods inventory plus targeted ending finished goods inventory.

Question 38

The financial budget is that part of the master budget that comprises the capital budget, cash budget, operating budget, and budgeted balance sheet.

Question 39

Unit sales of Product 1 are currently 20,000, while unit sales of Product 2 are currently double those of Product 1. What will the company's sales forecast be assuming sales of Product 1 increase by 10 percent and those of Product 2 go up by 8,000 units from the current level?

A) 20,000 and 40,000 units, respectively
B) 22,000 and 44,000 units, respectively
C) 22,000 and 46,000 units, respectively
D) 76,000 units
E) 22,000 and 48,000 units, respectively

Question 40

For next year Flexsteel Company has budgeted sales of 40,000 units, target ending finished goods inventory of 2,000 units, and a beginning finished goods inventory of 1,200 units. All other inventories are zero. How many units should be produced?

A) 39,200 units
B) 40,000 units
C) 41,800 units
D) 42,800 units
E) 40,800 units

Question 41

Answer the following question(s) using the information below.
Furniture Inc. estimates the following number of mattress sales for the first four months of 2013:
Finished goods inventory at the end of December 2012 is 1,500 units. Target ending finished goods inventory is 30% of the next month's sales.
How many mattresses need to be produced in January 2013?

A) 4,400 mattresses
B) 5,000 mattresses
C) 6,500 mattresses
D) 7,100 mattresses
E) 5,600 mattresses

Question 42

How many flowerpots should Country Heather produce in 2007?

A) 48,000 flowerpots
B) 44,000 flowerpots
C) 41,000 flowerpots
D) 39,000 flowerpots
E) 18,000 flowerpots

Question 43

Use the information below to answer the following question(s).
Layne Cedar manufactures cedar chests. The estimated number of chests for the first three months of 2012 is as follows:
Finished goods inventory at the end of December is 3,000 units. Ending finished goods are equal to 30 percent of next month's sales. April 2012 sales are expected to total 16,000 units.
What should be the budgeted number of chests produced in January 2012?

A) 8,800 chests
B) 11,200 chests
C) 13,000 chests
D) 14,200 chests
E) 14,700 chests

Question 44

What will be Berry's Boxes cost of goods sold in 2012?

A) $42,000
B) $24,000
C) $38,000
D) $30,000
E) $34,000

Question 45

What will be Fair Score Company's budgeted total sales for 2012?

A) $18,400,000
B) $17,600,000
C) $16,000,000
D) $15,200,000
E) $12,300,000

Question 46

Use the information below to answer the following question(s).
Contempo Futon manufactures futons. The estimated number of sales for the last quarter of 2012 is as follows:
Beginning finished goods inventory should be equal to 30 percent of that month's budgeted sales plus 10 percent of the following month's budgeted sales. January and February 2013 sales are anticipated to be 15,000 futons in each month. The cost to produce a futon is $125.
What should be the number of futons Contempo Futon budgets to be produced in November?

A) 34,000 futons
B) 32,500 futons
C) 26,200 futons
D) 25,000 futons
E) 23,000 futons

Question 47

How many scoreboards should Fair Score Company produce in 2012?

A) 23,000
B) 21,000
C) 20,000
D) 19,000
E) 16,000

Question 48

Use the information below to answer the following question(s).
Layne Cedar manufactures cedar chests. The estimated number of chests for the first three months of 2012 is as follows:
Finished goods inventory at the end of December is 3,000 units. Ending finished goods are equal to 30 percent of next month's sales. April 2012 sales are expected to total 16,000 units.
How many chests should be budgeted to be produced in the first quarter of 2012?

A) 37,000 chests
B) 44,800 chests
C) 41,800 chests
D) 38,800 chests
E) 48,400 chests

Question 49

What will be Country Heather's budgeted revenue?

A) $216,000
B) $240,000
C) $312,000
D) $318,000
E) $300,500

Question 50

How many boxes should Berry's Boxes produce in 2012?

A) 24,000 boxes
B) 20,000 boxes
C) 19,500 boxes
D) 20,500 boxes
E) 22,500 boxes

Question 51

The budgeting process generally concludes with the preparation of the

A) cash budget.
B) selling expense budget.
C) budgeted financial statements.
D) research and development budget.
E) production budget.

Question 52

What will be Fair Score Company's budgeted total cost of direct materials used in 2012?

A) $3,400,000
B) $3,800,000
C) $3,600,000
D) $3,200,000
E) $3,155,000

Question 53

Use the information below to answer the following question(s).
Contempo Futon manufactures futons. The estimated number of sales for the last quarter of 2012 is as follows:
Beginning finished goods inventory should be equal to 30 percent of that month's budgeted sales plus 10 percent of the following month's budgeted sales. January and February 2013 sales are anticipated to be 15,000 futons in each month. The cost to produce a futon is $125.
How many futons will Contempo Futon budget to be produced in the three months?

A) 72,500 futons
B) 75,000 futons
C) 82,500 futons
D) 90,000 futons
E) 98,650 futons

Question 54

What will be Country Heather's cost of goods sold?

A) $122,400
B) $136,000
C) $139,400
D) $149,600
E) $101,500

Question 55

What will be Country Heather's total costs incurred for direct materials, direct manufacturing labour, and manufacturing overhead, respectively, for 2007?

A) $0; $40,000; $16,000
B) $0; $41,000; $16,000
C) $80,000; $40,000; $16,000
D) $82,000; $41,000; $16,400
E) $84,000; $40,000; $16,400

Question 56

Answer the following question(s) using the information below.
Furniture Inc. estimates the following number of mattress sales for the first four months of 2013:
Finished goods inventory at the end of December 2012 is 1,500 units. Target ending finished goods inventory is 30% of the next month's sales.
How many mattresses need to be produced in the first quarter (January, February, March) of 2013?

A) 18,500 mattresses
B) 19,400 mattresses
C) 20,900 mattresses
D) 22,400 mattresses
E) 18,000 mattresses

Question 57

Use the information below to answer the following question(s).
Contempo Futon manufactures futons. The estimated number of sales for the last quarter of 2012 is as follows:
Beginning finished goods inventory should be equal to 30 percent of that month's budgeted sales plus 10 percent of the following month's budgeted sales. January and February 2013 sales are anticipated to be 15,000 futons in each month. The cost to produce a futon is $125.
What will be Contempo Futon's cost of goods manufactured for December?

A) $3,937,500
B) $3,750,000
C) $2,812,500
D) $2,625,000
E) $3,187,500

Question 58

In going from the sales budget to the production budget, adjustments need to be made for

A) finished goods inventories.
B) overhead charges.
C) direct materials inventories.
D) sales returns and allowances.
E) changing from revenue to costs.

Question 59

What will be Berry's Boxes production costs incurred for direct materials, direct manufacturing labour, and manufacturing overhead, respectively, for 2012?

A) $20,500; $10,250; $4,100
B) $19,500; $9,750; $3,900
C) $10,000; $5,000; $4,000
D) $22,500; 11,250; $4,500
E) $12,000; $6,000; $4,800

Question 60

What will be the Fair Score Company budgeted amount of cost of goods sold?

A) $8,160,000
B) $6,800,000
C) $6,460,000
D) $6,120,000
E) $5,975,000

Question 61

Use the information below to answer the following question(s).
Daniel Inc. expects to sell 6,000 ceramic vases for $20 each in 2012. Direct materials costs are $2, direct manufacturing labour is $10, and manufacturing overhead is $3 per vase. Each vase requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started. Each vase requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2012:

On the 2012 budgeted income statement, what amount will be reported for cost of goods sold?

A) $91,500
B) $105,000
C) $90,000
D) $88,500
E) $72,000

Question 62

Boone Hobbies budgeted purchases for next month is expected to be

A) $240,000.
B) $264,000.
C) $225,000.
D) $360,000.
E) $244,000.

Question 63

Tripp Company sells three products with the following seasonal sales pattern:
The annual sales budget shows forecasts for the different products and their expected selling price per unit as follows:
Required:
Prepare a revenue budget in dollars for each quarter. Present each quarter in a separate column and add a column to show total year sales.

Question 64

Boone Hobbies gross margin for next month is expected to be

A) $280,000.
B) $336,000.
C) $356,000.
D) $360,000.
E) $240,000.

Question 65

A rolling budget is a budget or plan that

A) rolls several budgets together for forecasting purposes.
B) has one budget category roll into the next category.
C) rolls all budget categories together into a master budget.
D) is always available for a specified future period by replacing time periods as the lapse.
E) is not used to guide operations.

Question 66

Use the information below to answer the following question(s).
Marguerite Inc.. expects to sell 20,000 pool cues for $20.00 each. Direct materials costs are $2.00, direct manufacturing labour is $12.00, and manufacturing overhead is $0.80 per pool cue. Each pool cue requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started.. Each pool cue requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2012:

What are the 2012 budgeted costs for direct manufacturing labour?

A) $248,000
B) $247,200
C) $249,000
D) $246,600
E) $246,000

Question 67

Use the information below to answer the following question(s).
Marguerite Inc.. expects to sell 20,000 pool cues for $20.00 each. Direct materials costs are $2.00, direct manufacturing labour is $12.00, and manufacturing overhead is $0.80 per pool cue. Each pool cue requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started.. Each pool cue requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2012:

Shamokin Manufacturing produces two products, Big and Bigger. Shamokin expects to sell 10,000 units of product Bigger and to have an inventory of 2,000 units of Bigger on hand at the end of the period. Currently, Shamokin has 800 units of Bigger on hand. Bigger requires two labour operations, molding and polishing. Each unit of Bigger requires one hour of molding and two hours of polishing. The direct labour rate for molding is $20 per molding hour and the direct labour rate for polishing is $25 per polishing hour. The expected number of hours of direct labour for Bigger is

A) 8,800 hours of molding; 17,600 hours of polishing.
B) 11,200 hours of molding; 22,400 hours of polishing.
C) 17,600 hours of molding; 8,800 hours of polishing.
D) 22,400 hours of molding; 11,200 hours of polishing.
E) 10,000 hours of molding; 20,000 hours of polishing.

Question 68

Use the information below to answer the following question(s).
Konrade Inc. expects to sell 30,000 athletic uniforms for $80 each in 2012. Direct materials costs are $20, direct manufacturing labour is $8, and manufacturing overhead is $6 for each uniform. Each uniform requires 2.0 square metres (sq. m.) of material which is all added at the start of production. The following inventory levels are expected to apply to 2012:

What is the amount budgeted for cost of goods sold in 2012?

A) $1,156,000
B) $986,000
C) $840,000
D) $2,400,000
E) $1,020,000

Question 69

Use the information below to answer the following question(s).
Marguerite Inc.. expects to sell 20,000 pool cues for $20.00 each. Direct materials costs are $2.00, direct manufacturing labour is $12.00, and manufacturing overhead is $0.80 per pool cue. Each pool cue requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started.. Each pool cue requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2012:

On the 2012 budgeted income statement, what amount will be reported for cost of goods sold?

A) $296,000
B) $280,000
C) $276,000
D) $290,000
E) $292,000

Question 70

Use the information below to answer the following question(s).
Marguerite Inc.. expects to sell 20,000 pool cues for $20.00 each. Direct materials costs are $2.00, direct manufacturing labour is $12.00, and manufacturing overhead is $0.80 per pool cue. Each pool cue requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started.. Each pool cue requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2012:

How many kilograms of material will need to be purchased for 2012 production and inventory requirements?

A) 11,500 kg
B) 10,700 kg
C) 10,300 kg
D) 10,500 kg
E) 10,000 kg

Question 71

Use the information below to answer the following question(s).
Daniel Inc. expects to sell 6,000 ceramic vases for $20 each in 2012. Direct materials costs are $2, direct manufacturing labour is $10, and manufacturing overhead is $3 per vase. Each vase requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started. Each vase requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2012:

How many kilograms of material will need to be purchased for 2012 production and inventory requirements?

A) 3,100 kg
B) 2,900 kg
C) 2,750 kg
D) 3,150 kg
E) 2,950 kg

Question 72

Use the information below to answer the following question(s).
Marguerite Inc.. expects to sell 20,000 pool cues for $20.00 each. Direct materials costs are $2.00, direct manufacturing labour is $12.00, and manufacturing overhead is $0.80 per pool cue. Each pool cue requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started.. Each pool cue requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2012:

On the 2012 budgeted income statement, what amount will be reported for gross margin?

A) $124,000
B) $104,000
C) $312,000
D) $160,000
E) $400,000

Question 73

Frame Antique manufactures picture frames. Sales for May are expected to be 20,000 units of various sizes. Historically, the average frame requires three metres of framing, one square metre of glass, and two square metres of backing. Beginning inventory includes 3,000 metres of framing, 1,000 square metres of glass, and 1,000 square metres of backing. Current prices are $0.20 per metre of framing, $4.00 per square metre of glass, and $1.50 per square metre of backing. Ending inventory should be 150 percent of beginning inventory. Purchases are paid for in the month acquired.
Required:
a. Determine the quantity of framing, glass, and backing that is to be purchased during May.
b. Determine the total costs of direct materials for May purchases.

Question 74

Use the information below to answer the following question(s).
Konrade Inc. expects to sell 30,000 athletic uniforms for $80 each in 2012. Direct materials costs are $20, direct manufacturing labour is $8, and manufacturing overhead is $6 for each uniform. Each uniform requires 2.0 square metres (sq. m.) of material which is all added at the start of production. The following inventory levels are expected to apply to 2012:

What is the amount budgeted for cost of goods manufactured in 2012?

A) $1,020,000
B) $986,000
C) $1,156,000
D) $1,190,000
E) $1,054,000

Question 75

Use the information below to answer the following question(s).
Daniel Inc. expects to sell 6,000 ceramic vases for $20 each in 2012. Direct materials costs are $2, direct manufacturing labour is $10, and manufacturing overhead is $3 per vase. Each vase requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started. Each vase requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2012:

On the 2012 budgeted income statement, what amount will be reported for gross margin?

A) $122,000
B) $90,000
C) $48,000
D) $30,000
E) $120,000

Question 76

The operating budget includes the

A) capital budget.
B) cash budget.
C) budgeted balance sheet.
D) budgeted cash flow statement.
E) production budget.

Question 77

Use the information below to answer the following question(s).
Daniel Inc. expects to sell 6,000 ceramic vases for $20 each in 2012. Direct materials costs are $2, direct manufacturing labour is $10, and manufacturing overhead is $3 per vase. Each vase requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started. Each vase requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2012:

What are the 2012 budgeted costs for direct manufacturing labour?

A) $62,000
B) $60,000
C) $61,000
D) $59,000
E) $63,000

Question 78

Use the information below to answer the following question(s).
Marguerite Inc.. expects to sell 20,000 pool cues for $20.00 each. Direct materials costs are $2.00, direct manufacturing labour is $12.00, and manufacturing overhead is $0.80 per pool cue. Each pool cue requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started.. Each pool cue requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2012:

How many pool cues need to be produced in 2012?

A) 22,500 cues
B) 18,000 cues
C) 20,000 cues
D) 19,500 cues
E) 20,500 cues

Question 79

Spirit Company sells three products with the following seasonal sales pattern:
The annual sales budget shows forecasts for the different products and their expected selling price per unit as follows:
Required:
Prepare a sales budget, in units and dollars, by quarters for the company for the coming year.

Question 80

Use the information below to answer the following question(s).
Daniel Inc. expects to sell 6,000 ceramic vases for $20 each in 2012. Direct materials costs are $2, direct manufacturing labour is $10, and manufacturing overhead is $3 per vase. Each vase requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started. Each vase requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2012:

How many ceramic vases need to be produced in 2012?

A) 5,900 vases
B) 6,100 vases
C) 7,000 vases
D) 6,000 vases
E) 6,300 vases