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Exam 8: Master Budgeting

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Question 51

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Pabon Corporation makes one product.Budgeted unit sales for August and September are 11,100 and 12,600 units, respectively.The ending finished goods inventory equals 40% of the following month's sales.The direct labor wage rate is $19.00 per hour.Each unit of finished goods requires 2.5 direct labor-hours.The estimated direct labor cost for August is closest to:

A) $389,000
B) $555,750
C) $29,250
D) $222,300

E) All of the above
F) None of the above

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Question 52

Multiple Choice

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

A) $44,388
B) $117,957
C) $101,517
D) $145,905

E) A) and B)
F) None of the above

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Question 53

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Accounts payable at the end of December would be:

Catano Corporation pays for 40% of its raw materials purchases in the month of purchase and 60% in the following month.If the budgeted cost of raw materials purchases in July is $256,550 and in August is $278,050, then in August the total budgeted cash disbursements for raw materials purchases is closest to:

Sleeter Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: a.Budgeted unit sales for April, May, June, and July are 7,500, 11,900, 10,800, and 14,800 units, respectively.All sales are on credit. b.The ending finished goods inventory equals 30% of the following month's sales. c.The ending raw materials inventory equals 30% of the following month's raw materials production needs.Each unit of finished goods requires 6 pounds of raw materials.The raw materials cost $5.00 per pound. If 72,000 pounds of raw materials are required for production in June, then the budgeted cost of raw material purchases for May is closest to:

The direct labor budget shows the direct labor-hours required to satisfy the production budget.

The budgeted cash receipts for December are:

How much of the raw material should the company purchase during the year?

December cash disbursements for merchandise purchases would be:

Douglas Corporation plans to sell 24,000 units of Product A during July and 30,000 units during August.Sales of Product A during June were 25,000 units.Past experience has shown that end-of-month inventory should equal 3,000 units plus 30% of the next month's sales.On June 30 this requirement was met.Based on these data, how many units of Product A must be produced during the month of July?

The company has budgeted to produce 28,000 units of Product T in June.The finished goods inventories on June 1 and June 30 were budgeted at 800 and 600 units, respectively.Budgeted direct labor costs for June would be:

Tsosie Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: > The budgeted selling price per unit is $103.Budgeted unit sales for April, May, June, and July are 9,300, 11,300, 9,800, and 12,800 units, respectively.All sales are on credit. > Regarding credit sales, 20% are collected in the month of the sale and 80% in the following month. > The ending finished goods inventory equals 10% of the following month's sales. > The ending raw materials inventory equals 10% of the following month's raw materials production needs.Each unit of finished goods requires 2 pounds of raw materials.The raw materials cost $4.00 per pound. > Regarding raw materials purchases, 10% are paid for in the month of purchase and 90% in the following month. > The direct labor wage rate is $20.00 per hour.Each unit of finished goods requires 2.7 direct labor-hours. > The variable selling and administrative expense per unit sold is $3.70.The fixed selling and administrative expense per month is $80,000. Required: a.What are the budgeted sales for May? b.What are the expected cash collections for May? c.What is the budgeted accounts receivable balance at the end of May? d.According to the production budget, how many units should be produced in May? e.If 20,200 pounds of raw materials are needed for production in June, how many pounds of raw materials should be purchased in May? f.What is the estimated cost of raw materials purchases for May? g.If the cost of raw material purchases in April is $77,320, then in May what are the total estimated cash disbursements for raw materials purchases? h.What is the estimated accounts payable balance at the end of May? i.What is the estimated raw materials inventory balance at the end of May? j.What is the total estimated direct labor cost for May 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 $11.00 per direct labor-hour.What is the estimated unit product cost? l.What is the estimated finished goods inventory balance at the end of May? m.What is the estimated cost of goods sold and gross margin for May? n.What is the estimated total selling and administrative expense for May? o.What is the estimated net operating income for May?

Knappert Corporation makes one product and has provided the following information: a.Each unit of finished goods requires 3 pounds of raw materials.The raw materials cost $5.00 per pound. B.The direct labor wage rate is $24.00 per hour.Each unit of finished goods requires 2.8 direct labor-hours. C.Manufacturing overhead is entirely variable and is $11.00 per direct labor-hour. D.The variable selling and administrative expense per unit sold is $3.80.The fixed selling and administrative expense per month is $50,000. The unit product cost is closest to:

The budgeted cash receipts for October would be:

Seventy percent of Pitkin Corporation's sales are collected in the month of sale, 20% in the month following sale, and 10% in the second month following sale.The following are budgeted sales data for the company: Total budgeted cash collections in April would be:

The master budget consists of a number of separate but interdependent budgets.

If the budgeted direct labor time for November is 7,000 hours, then the total budgeted cash disbursements for manufacturing overhead for November must be:

If 40,380 pounds of raw materials are required for production in December, then the budgeted raw material purchases for November is closest to:

If 41,920 pounds of raw materials are required for production in September, then the budgeted raw material purchases for August is closest to:

Accounts payable at the end of December would be: