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Exam 8: Master Budgeting

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Question 1

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Haylock Inc.bases its manufacturing overhead budget on budgeted direct labor-hours.The direct labor budget indicates that 5,600 direct labor-hours will be required in August.The variable overhead rate is $5.40 per direct labor-hour.The company's budgeted fixed manufacturing overhead is $69,440 per month, which includes depreciation of $15,680.All other fixed manufacturing overhead costs represent current cash flows.The August cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

A) $99,680
B) $84,000
C) $53,760
D) $30,240

E) All of the above
F) A) and B)

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Question 2

Multiple Choice

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What is the budgeted accounts receivable balance on May 31?

A) $56,000
B) $64,000
C) $76,000
D) $132,000

E) B) and D)
F) All of the above

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C

Question 3

Multiple Choice

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Sirignano Corporation produces and sells one product.The budgeted selling price per unit is $84.Budgeted unit sales for October, November, December, and January are 8,400, 12,000, 13,800, and 14,300 units, respectively.All sales are on credit with 40% collected in the month of the sale and 60% in the following month.The expected cash collections for November is closest to:

The estimated selling and administrative expense for February is closest to:

If the budgeted cash disbursements for manufacturing overhead for December total $105,000, then the budgeted direct labor-hours for December must be:

The cash balance at the end of December would be:

The February cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

The selling and administrative expense budget of Garney Corporation is based on the number of units sold, which are budgeted to be 1,800 units in October.The variable selling and administrative expense is $2.00 per unit.The budgeted fixed selling and administrative expense is $22,680 per month, which includes depreciation of $7,020.The remainder of the fixed selling and administrative expense represents current cash flows. Required: Prepare the selling and administrative expense budget for October.

Tilson Corporation has projected sales and production in units for the second quarter of the coming year as follows: Cash-related production costs are budgeted at $7 per unit produced.Of these production costs, 40% are paid in the month in which they are incurred and the balance in the following month.Selling and administrative expenses will amount to $110,000 per month.The accounts payable balance on March 31 totals $193,000, which will be paid in April. All units are sold on account for $16 each.Cash collections from sales are budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the remaining 10% in the second month following the month of sale.Accounts receivable on April 1 totaled $520,000 ($100,000 from February's sales and $420,000 from March's sales). Required: a.Prepare a schedule for each month showing budgeted cash disbursements for Tilson Corporation. b.Prepare a schedule for each month showing budgeted cash receipts for Tilson Corporation.

Sedita Inc.is working on its cash budget for July.The budgeted beginning cash balance is $46,000.Budgeted cash receipts total $175,000 and budgeted cash disbursements total $174,000.The desired ending cash balance is $50,000.The excess (deficiency) of cash available over disbursements for July will be:

The company recomputes its predetermined overhead rate every month.The predetermined overhead rate for October should be:

The net income for December would be:

The budgeted required production for February is closest to:

The Jung Corporation's production budget calls for the following number of units to be produced each quarter for next year: Budgeted production Each unit of product requires three pounds of direct material.The company's policy is to begin each quarter with an inventory of direct materials equal to 30% of that quarter's direct material requirements.Budgeted direct materials purchases for the third quarter would be:

Fredericksen Corporation makes one product and has provided the following information: The estimated cost of goods sold for February is closest to:

The estimated cost of goods sold for February is closest to:

The total cost of Material K to be purchased in August is:

Schuepfer Inc.bases its selling and administrative expense budget on budgeted unit sales.The sales budget shows 1,300 units are planned to be sold in March.The variable selling and administrative expense is $4.20 per unit.The budgeted fixed selling and administrative expense is $19,240 per month, which includes depreciation of $3,380 per month.The remainder of the fixed selling and administrative expense represents current cash flows.The cash disbursements for selling and administrative expenses on the March selling and administrative expense budget should be:

When preparing a direct materials budget, beginning inventory for raw materials should be added to production needs, and desired ending inventory should be subtracted to determine the amount of raw materials to be purchased.

The cash balance at the end of December would be: