Need A Tutor?    |   Need Homework Help?                                                                             Help and Support     | Join or Cancel

Homework  1.1 1.2  2.1 2.2  3.1 3.2  4.1 4.2 5.1 5.2  6.1 6.2  7.1  7.2  8.1  8.2  9.1   9.2  10.1  10.2  11.1  11.2  12.1 12.2  13.1  13.2  14.1  14.2  15.1   15.2
Learnsmart  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15   |  Exam  1  2  3  4  5  6  7  8  9  10  11  12   13  14  15  |  Final Exam 1   2    Homework Help?

Masterson Company's budgeted production calls for 64,000 liters in April and 60,000 liters in May of a key raw material that costs
$1.95 per liter. Each month's ending raw materials inventory should equal 20% of the following month's budgeted materials.
The April 1 inventory for this material is 12,800 liters. What is the budgeted materials purchases for April?
 
$123,240
$124,800.
$129,480.
$148,200.
$99,840.
 
64000 + (60000 x .2) - (12800) x 1.95
   
A sporting goods manufacturer budgets production of 57,000 pairs of ski boots in the first quarter and 48,000 pairs in the second
quarter of the upcoming year. Each pair of boots require 2 kg of a key raw material. The company aims to end each quarter with
ending raw materials inventory equal to 25% of the following quarter's material needs. Beginning inventory for this material is
28,500 kg and the cost per kg is $7. What is the budgeted materials purchases cost for the first quarter?
 
$598,500.
$997,500.
$766,500
$829,500.
$798,000.
 
57000 x 2 - 28500 + 48000 x 2 x .25 x 8 = 766,500
   
Flagstaff Company has budgeted production units for July of 7,000 units. Variable factory overhead is $1.1 per unit. Budgeted fixed factory overhead is $14,500, which includes $2,100 of factory equipment depreciation.
Compute the total budgeted overhead to be reported on the factory overhead budget for the month.
 
$14,500.
$20,100.
$19,400.
$7,700.
$22,200
 
7000 x 1.1 + 14500 = 22,200
   
Southland Company is preparing a cash budget for August. The company has $18,100 cash at the beginning of August and
anticipates $123,000 in cash receipts and $136,700 in cash disbursements during August. Southland Company wants to
maintain a minimum cash balance of $10,000. To maintain the minimum cash balance of $10,000, the company must borrow:
 
$10,000.
$28,100.
$8,100.
$5,600.
$0.
 
136700 - 123000 - 18100 + 10000 = 5600
   
Masterson Company's budgeted production calls for 74,000 liters in April and 70,000 liters in May of a key raw material that costs
$2.00 per liter. Each month's ending raw materials inventory should equal 25% of the following month's budgeted materials.
The April 1 inventory for this material is 18,500 liters. What is the budgeted materials need in liters for April?
 
91,500 liters.
73,000 liters
55,500 liters.
74,000 liters.
76,000 liters.
 
74000 + 70000 x .25 - 740000 x .25
   
Memphis Company's May sales budget calls for sales of $830,000. The store expects to begin May with $43,000 of inventory
and to end the month with $48,000 of inventory. Gross margin is typically 35% of sales. Compute the budgeted cost of merchandise purchases for May.
 
$577,000.
$388,000.
$393,000.
$587,000.
$582,000
 
830000 - (830000 x ..35) + 48000 - 43000 =
970000 - (970000 x .4) + 62000 - 57000 = 587,000
   
Junior Snacks reports the following information from its sales budget:
                                                                 
Expected Sales:
October                               $             138,000                
November                                          146,000                
December                                           182,000
 
All sales are on credit and are expected to be collected 40% in the month of sale and 60% in the month following sale.
The total amount of cash expected to be received from customers in November is:
 
Expected Sales
October                               $             133,000                
November                                          141,000                
December                                           177,000              
 
$58,400.
$228,800.
$146,000.
$141,200
$82,800
 
146000 x .4 + 138000 x .6 = 141,200
   
A department store has budgeted sales of 12,400 men's suits in September. Management wants to have 6,400 suits in inventory at the
end of the month to prepare for the winter season. Beginning inventory for September is expected to be 4,400 suits. What is the dollar
amount of the purchase of suits if each suit has a cost of $79.
 
$979,600.
$821,600.
$1,137,600
$1,327,200.
$1,485,200.
 
12400 + 6400 - 4400 x 79 = 1,137,600
   
Western Company is preparing a cash budget for June. The company has $10,400 cash at the beginning of June and anticipates $31,600 in cash receipts and $37,700 in cash disbursements during June. Western Company has an agreement with its bank to maintain a minimum cash balance of $10,000. As of May 31, the company owes $15,000 to the bank. To maintain the $10,000
required balance, during June the company must:
 
Borrow $5,700
Borrow $6,100.
Borrow $10,000.
Repay $5,700.
Repay $4,300.
 
10400 + 31600 - 37700 - 10000 = 5,700
   
Webster Corporation is preparing a master budget for the first quarter of the year. The company budgets production of 2,900 units in
January, 2,710 units in February and 3,290 units in March. Each unit requires 0.6 hours of direct labor. The direct labor rate is $12 per hour. Compute the budgeted direct labor cost for the first quarter budget.
 
$106,800.
$58,536.
$53,400.
$97,560.
$64,080
 
2900 + 2710 + 3290 x .6 x 12 = 64,080
   
On its December 31, 2017, balance sheet, Calgary Industries reports equipment of $400,000 and accumulated depreciation of $80,000.
During 2018, the company plans to purchase additional equipment costing $86,000 and expects depreciation expense of $33,000.
Additionally, it plans to dispose of equipment that originally cost $45,000 and had accumulated depreciation of $6,200.
The balances for equipment and accumulated depreciation, respectively, on the December 31, 2018 budgeted balance sheet are:
 
$486,000; $113,000.
$441,000; $113,000.
$486,000; $106,800.
$441,000; $106,800
$355,000; $80,000
 
400000 + 86000 - 45000 = 441000, 80000 + 33000 - 6200 = 106800
   
Grason Corporation is preparing a budgeted balance sheet for 2018. The retained earnings balance at December 31, 2017 was $532,500.
The 2018 budgeted income statement shows expected net income of $111,500. The company expects to declare dividends during 2018
amounting to $39,500. The expected balance in retained earnings on the 2018 budgeted balance sheet is:
 
$683,500.
$532,500.
$604,500
$493,000.
$644,000.
   
Bengal Co. provides the following sales forecast for the next three months:
 
                                July                        August                  September
Sales units             5,800                     6,500                     6,360  
 
The company wants to end each month with ending finished goods inventory equal to 30% of the next month's sales.
Finished goods inventory on June 30 is 1,740 units. The budgeted production units for July are:
 
7,540 units.
7,750 units.
6,010 units
4,060 units.
3,480 units.
 
6500 x .3 + 5800 - 1740 = 6,010
   
Flack Corporation, a merchandiser, provides the following information for its December budgeting process:

The November 30 inventory was 1,800 units.
Budgeted sales for December are 4,000 units.
Desired December 31 inventory is 2,840 units.
 
Budgeted purchases are:
 
6,840 units.
1,240 units.
5,040 units
4,000 units.
5,800 units.
 
4000 = 1800 + x - 2840
x = 4000 + 2840 - 1800
x = 5040
   
A sporting equipment store expects to purchase $8,700 of ski boots in October. The store had $2,300 of ski boots in merchandise inventory at the beginning of October, and expects to have $1,300 of ski boots in merchandise inventory at the end of October to
cover part of anticipated November sales. What is the budgeted cost of goods sold for October?
 
Multiple Choice
 
$3,600.
$8,700.
$9,700
$10,000.
$11,000.
 
8700 + 2300 - 1300 = 9700
   
Bioclean Co., a merchandiser, sells a biodegradable cleaning product and has predicted the following sales for the first four months of the current year:
 
                                Jan.                        Feb.                     March                   April        
Sales in Units        1,750                    1,950                    2,150                    1,650     
 
 
Ending inventory for each month should be 10% of the next month's sales, and the December 31 inventory is consistent with that policy.
How many units should be purchased in February?
 
1,950.
2,165
1,970.
1,930.
1,990
 
1950 + (2150 x .1) - (1950 x .1) = 1,970
   
A company's history indicates that 25% of its sales are for cash and the rest are on credit. Collections on credit sales are 25%
in the month of the sale, 45% in the next month, 20% the following month, and 10% is uncollectible. Projected sales for December, January, and February are $61,000, $86,000 and $96,000, respectively. The February expected cash receipts from all current
and prior credit sales is:
 
$100,000
$51,375
$25,688
$72,375
$61,875
 
(96000 x .25) + (86000 x .45) + (61000 x .2) x .75
(105000 x .2) + (95000 x .5) + (70000 x .2) x .75 = 61,875
   
Boulware Company’s budgeted production calls for 6,300 units in October and 9,300 units in November. Each unit requires 7 pounds (lbs.) of raw material A. Each month’s ending inventory of raw materials should equal 25% of the following month’s budgeted materials requirements. The October 1 inventory for this material is 11,025 pounds. What is the budgeted materials purchases for this key
material in pounds for October?
 
37,725 lbs.
71,400 lbs.
44,100 lbs.
60,375 lbs.
49,350 lbs
 
(6300 x 7) + (9300 x 7 x .25) - 11025 = 49,350
   
Flagstaff Company has budgeted production units of 9,100 for July and 9,300 for August. The direct materials requirement per unit is
2 ounces (oz.). The company has determined that it wants to have safety stock of direct materials on hand at the end of each month to
complete 20% of the units budgeted in the following month. There was 3,640 ounces of direct material in inventory at the start of July.
The total cost of direct materials purchases for the July direct materials budget, assuming the materials cost $1.15 per ounce, is:
 
$25,208.
$16,744.
$20,930.
$20,838.
$21,022.
 
9100 x 2 x 1.15 = 20,930
   
A company's history indicates that 30% of its sales are for cash and the rest are on credit. Collections on credit sales are 20% in the
month of the sale, 50% in the next month, 25% the following month, and 5% is uncollectible. Projected sales for December, January,
and February are $65,000, $90,000 and $100,000, respectively. The February expected cash receipts from all current and prior credit sales is:  
 
Amount collected in February:$56,875
 
                                                                                 
20% of February credit sales                      20% * (70% * $100,000) =            $             14,000
50% of January credit sales                        50% * (70% * $90,000) =                             31,500
25% of December credit sales                   25% * (70% * $65,000) =              11,375
 
Total collected in February                                                                                         $             56,875
   
Zhang Industries budgets production of 200 units in June and 210 units in July. Each unit requires 1.5 hours of direct labor.
The direct labor rate is $12.00 per hour. The indirect labor rate is $19.00 per hour. Compute the budgeted direct labor cost for July.
 
$3,600.
$9,765.
$5,700.
$3,780
$5,985
   
Memphis Company anticipates total sales for April, May, and June of $850,000, $950,000, and $1,000,000 respectively.
Cash sales are normally 20% of total sales. Of the credit sales, 40% are collected in the same month as the sale, 55% are collected during the first month after the sale, and the remaining 5% are not collected. Compute the amount of cash received from total sales during the month of June.
 
$678,000.
$868,000.
$738,000.
$938,000.
$644,000.
 
190,000 + 304,000 + 374,000 = 868,000
   
Fortune Company's direct materials budget shows the following cost of materials to be purchased for the coming three months:

                                                January                   February            March    
Material purchases            $ 13,180                    15,290               12,110  
 
Payments for purchases are expected to be made 50% in the month of purchase and 50% in the month following purchase.
The December Accounts Payable balance is $7,900. The budgeted cash payments for materials in January are:
 
$14,235.
$10,540.
$7,900.
$14,490
$21,080.
   
A company's history indicates that 25% of its sales are for cash and the rest are on credit. Collections on credit sales are 25% in the
month of the sale, 45% in the next month, 20% the following month, and 10% is uncollectible. Projected sales for December, January,
and February are $61,000, $86,000 and $96,000, respectively. The February expected cash receipts from all current and prior credit sales is:
 
$46,575
$56,175
$65,775
$21,161
$81,900
   
A July sales forecast projects that 8,000 units are going to be sold at a price of $12.50 per unit. The management forecasts 15%
growth in sales each month. Total August sales are anticipated to be:
 
$70,560.
$74,880.
$68,000.
$100,000.
$72,000.
 
8,000 x $12.50 = $100,000
   
Cameroon Corp. manufactures and sells electric staplers for $15.60 each. If 10,000 units were sold in December, and management forecasts 5% growth in sales each month, the dollar amount of electric stapler sales budgeted for February should be:
 
$189,620
$163,800
$180,590
$171,990
$156,000
 
10000 x 1.05 x 1.05 x 15.60 = 171,990
   
Aloan Co. provides the following sales forecast for the next three months:
 
                                               January                               February                            March    
Sales units                          3,200                                    4,400                                    5,200     
 
 
The company wants to end each month with ending finished goods inventory equal to 20% of the next month’s sales.
Finished goods inventory on December 31 is 640 units. The budgeted production units for January are:
 
128 units.
3,440 units.
3,200 units.
4,080 units.
2,960 unit
 
3220 x (4400 x .2) – 640 = 3,440
   
The formula for the gross margin percentage is:
 
A.​ (Sales ­ Cost of goods sold)/Cost of goods sold
B.​ (Sales ­ Cost of goods sold)/Sales
C. ​Net income/Sales
D.​ Net income/Cost of goods sold
   
The ratio of cash, trade receivables, and marketable securities to current liabilities is:
 
A. the working capital of a company.
B.​ the acid­test ratio.
C. ​the current ratio.
D. ​the debt to equity ratio.
   
Fraser Company had $130,000 in sales on account last year.
The beginning accounts receivable balance was $10,000 and the ending accounts receivable balance was $14,000.
The company's accounts receivable turnover was closest to:
 
A.​5.42
B.​13.00
C.​9.29
D.​10.83
   
In a job­order costing system, indirect materials that have been previously purchased and that are used  in
production are  recorded as a debit to:
 
A.​ Work in Process inventory.
B.​ Manufacturing Overhead.
C. ​Finished Goods inventory.
D. ​Raw Materials inventory.
   
Webster Corporation's monthly projected general and administrative expenses include $6,000 administrative salaries, $3,400 of
other cash administrative expenses, $1,850 of depreciation expense on the administrative equipment, and 0.5% monthly interest
on an outstanding bank loan of $20,000. Compute the total general and administrative expenses to be reported on the general and administrative expense budget per month.
 
$9,400.
$6,100.
$29,400.
$11,350.
$11,250
 
6000 + 3400 + 1850 = 11,250
   
The Gardner Company expects sales for October of $252,000. Experience suggests that 40% of sales are for cash and 60% are on credit. The company collects 50% of its credit sales in the month of sale and 50% in the month following sale. Budgeted Accounts Receivable on September 30 is $70,000.
What is the amount of Accounted Receivables on the October 31 budgeted balance sheet?
 
$100,800.
$69,000.
$246,000.
$151,200.
$75,600.
 
(252,000 x .4) + (252,000 x .6 x .5) + 70,000 = 246,000
   
Zhang Industries is preparing a cash budget for June. The company has $35,000 cash at the beginning of June and anticipates $109,000 in cash receipts and $136,290 in cash disbursements during June. The company has no loans outstanding on June 1. Compute the amount the company must borrow, if any, to maintain a $27,000 cash balance.
 
$34,710.
$19,290.
$20,290.
$11,290.
$27,290.
 
27,000 - (35,000 + 109,000 – 136,290) = 19,290
   
Larker Brothers, Inc., used the high-low method to derive its cost formula for electrical power cost.
According to the cost formula, the variable cost per unit of activity is $4 per machine-hour.
Total electrical power cost at the high level of activity was $19,200 and at the low level of activity was $18,400.
If the high level of activity was 3,300 machine hours, then the low level of activity was:


3,100 machine hours
3,200 machine hours
3,000 machine hours
2,900 machine hours
   
Gamach Corporation is a wholesaler that sells a single product.
Management has provided the following cost data for two levels of monthly sales volume.
The company sells the product for $104.50 per unit.

Sales volume (units)                                        5,000                    6,000
Cost of sales                                                 $ 295,000           $ 354,000
Selling and administrative costs                 $ 186,000           $ 202,800

The best estimate of the total monthly fixed cost is:

$102,000
$518,900
$556,800
$481,000
   
Edal Corporation has provided the following production and total cost data for two levels of monthly production volume. The company produces a single product.

Production volume                                            5,000 units             6,000 units
Direct materials                                 $             266,500               $ 319,800
Direct labor                                         $             52,000                $ 62,400
Manufacturing overhead                   $             748,500               $ 769,200

The best estimate of the total variable manufacturing cost per unit is:

$63.70
$84.40
$53.30
$20.70
   
Masterson Company's budgeted production calls for 64,000 liters in April and 60,000 liters in May of a key raw material that
costs $1.95 per liter. Each month's ending raw materials inventory should equal 20% of the following month's budgeted materials.
The April 1 inventory for this material is 12,800 liters. What is the budgeted materials purchases for April?
 
$123,240
$124,800.
$129,480.
$148,200.
$99,840.
 
64000 + (60000 x .2) - 12800 x 1.95
   
A sporting goods manufacturer budgets production of 40,000 pairs of ski boots in the first quarter and 31,000 pairs in the second
quarter of the upcoming year. Each pair of boots require 2 kg of a key raw material. The company aims to end each quarter with
ending raw material inventory equal to 25% of the following quarter's material needs. Beginning inventory for this material is
20,000 kg and the cost per kg is $9. What is the budgeted materials purchases cost for the first quarter?
 
$598,500.
$997,500.
$766,500
$829,500.
$798,000.
 
40000 x 2 - 20000 + 31000 x 2 x .25 x 9
57000 x 2 - 28500 + 48000 x 2 x .25 x 8 = 766,500
   
Flagstaff Company has budgeted production units for July of 7,000 units. Variable factory overhead is $1.1 per unit.
Budgeted fixed factory overhead is $14,500, which includes $2,100 of factory equipment depreciation.
Compute the total budgeted overhead to be reported on the factory overhead budget for the month.
 
$14,500.
$20,100.
$19,400.
$7,700.
$22,200
 
7000 x 1.1 + 14500 = 22,200
   
Southland Company is preparing a cash budget for August. The company has $18,100 cash at the beginning of August and anticipates
 $123,000 in cash receipts and $136,700 in cash disbursements during August. Southland Company wants to maintain a minimum
cash balance of $10,000. To maintain the minimum cash balance of $10,000, the company must borrow:
 
$10,000.
$28,100.
$8,100.
$5,600.
$0.
 
136700 - 123000 - 18100 + 10000 = 5600
   
Masterson Company's budgeted production calls for 74,000 liters in April and 70,000 liters in May of a key raw material that costs $2.00 per liter. Each month's ending raw materials inventory should equal 25% of the following month's budgeted materials.
The April 1 inventory for this material is 18,500 liters. What is the budgeted materials need in liters for April?
 
91,500 liters.
73,000 liters
55,500 liters.
74,000 liters.
76,000 liters.
 
74000 + 70000 x .25 - 740000 x .25
   
Memphis Company's May sales budget calls for sales of $970,000.
The store expects to begin May with $57,000 of inventory and to end the month with $62,000 of inventory.
Gross margin is typically 40% of sales. Compute the budgeted cost of merchandise purchases for May.
 
$577,000.
$388,000.
$393,000.
$587,000.
$582,000
 
970000 - (970000 x .4) + 62000 - 57000 = 587,000
   
Junior Snacks reports the following information from its sales budget:
                                                                 
 Expected Sales:  October                           $   138,000                
                                November                           146,000                
                                December                           182,000
 
All sales are on credit and are expected to be collected 40% in the month of sale and 60% in the month following sale.
The total amount of cash expected to be received from customers in November is:
 
$58,400.
$228,800.
$146,000.
$141,200
$82,800
 
146000 x .4 + 138000 x .6 = 141,200
   
A department store has budgeted sales of 12,400 men's suits in September.
Management wants to have 6,400 suits in inventory at the end of the month to prepare for the winter season.
Beginning inventory for September is expected to be 4,400 suits.
What is the dollar amount of the purchase of suits if each suit has a cost of $79.
 
$979,600.
$821,600.
$1,137,600
$1,327,200.
$1,485,200.
 
12400 + 6400 - 4400 x 79 = 1,137,600
   
Western Company is preparing a cash budget for June.
The company has $10,400 cash at the beginning of June and anticipates $31,600 in cash receipts and $37,700 in cash
disbursements during June. Western Company has an agreement with its bank to maintain a minimum cash balance of $10,000.
As of May 31, the company owes $15,000 to the bank. To maintain the $10,000 required balance, during June the company must:
 
Borrow $5,700
Borrow $6,100.
Borrow $10,000.
Repay $5,700.
Repay $4,300.
 
10400 + 31600 - 37700 - 10000 = Borrow $5,700
   
Webster Corporation is preparing a master budget for the first quarter of the year.
The company budgets production of 2,900 units in January, 2,710 units in February and 3,290 units in
March. Each unit requires 0.6 hours of direct labor. The direct labor rate is $12 per hour.
Compute the budgeted direct labor cost for the first quarter budget.
 
$106,800.
$58,536.
$53,400.
$97,560.
$64,080
 
2900 + 2710 + 3290 x .6 x 12 = 64,080
   
On its December 31, 2017, balance sheet, Calgary Industries reports equipment of $400,000 and accumulated depreciation of $80,000.
During 2018, the company plans to purchase additional equipment costing $86,000 and expects depreciation expense of $33,000.
Additionally, it plans to dispose of equipment that originally cost $45,000 and had accumulated depreciation of $6,200.
The balances for equipment and accumulated depreciation, respectively, on the December 31, 2018 budgeted balance sheet are:
 
$486,000; $113,000.
$441,000; $113,000.
$486,000; $106,800.
$441,000; $106,800
$355,000; $80,000
 
400000 + 86000 - 45000 = 441000
80000 + 33000 - 6200 = 106800
   
Grason Corporation is preparing a budgeted balance sheet for 2018.
The retained earnings balance at December 31, 2017 was $532,500.
The 2018 budgeted income statement shows expected net income of $111,500.
The company expects to declare dividends during 2018 amounting to $39,500.
The expected balance in retained earnings on the 2018 budgeted balance sheet is:
 
$683,500.
$532,500.
$604,500
$493,000.
$644,000.
 
532500 + 111500 – 39500 = 604,500
   
Bengal Co. provides the following sales forecast for the next three months:
 
                                July                        August                  September
Sales units             5,800                   6,500                   6,360  
 
The company wants to end each month with ending finished goods inventory equal to 30% of the next month's sales.
Finished goods inventory on June 30 is 1,740 units. The budgeted production units for July are:
 
7,540 units.
7,750 units.
6,010 units
4,060 units.
3,480 units.
 
6500 x .3 + 5800 - 1740 = 6,010
   
Flack Corporation, a merchandiser, provides the following information for its December budgeting process:
 
The November 30 inventory was 1,800 units.
Budgeted sales for December are 4,000 units.
Desired December 31 inventory is 2,840 units.
 
Budgeted purchases are:
 
6,840 units.
1,240 units.
5,040 units
4,000 units.
5,800 units.
 
4000 = 1800 + x - 2840
x = 4000 + 2840 - 1800
x = 5040
   
A sporting equipment store expects to purchase $8,700 of ski boots in October. The store had $2,300 of ski boots in merchandise inventory at the beginning of October, and expects to have $1,300 of ski boots in merchandise inventory at the end of October to cover part of anticipated November sales. What is the budgeted cost of goods sold for October?
 
$3,600.
$8,700.
$9,700
$10,000.
$11,000.
 
8700 + 2300 - 1300 = 9700
   
Bioclean Co., a merchandiser, sells a biodegradable cleaning product and has predicted the following
sales for the first four months of the current year:
 
                                                Jan.                        Feb.                  March                   April        
Sales in Units                      1,750                    1,950                    2,150                   1,650     
 
Ending inventory for each month should be 10% of the next month's sales, and the December 31 inventory is consistent with that policy.
How many units should be purchased in February?
 
1,950.
2,165
1,970.
1,930.
1,990
 
1950 + (2150 x .1) - (1950 x .1) = 1,970
   
Wichita Industries' sales are 10% for cash and 90% on credit.
Credit sales are collected as follows: 40% in the month of sale, 50% in the next month, and 10% in the following month.
On December 31, the accounts receivable balance includes $24,000 from November sales and $54,000 from December sales.
Assume that total sales for January and February are budgeted to be $62,000 and $124,000, respectively.
What are the expected cash receipts for February from current and past sales?
 
$36,900.
$40,300.
$60,900.
$93,940.
$51,700
 
(24000 x .1) + (54000 x .5) + [(124000 x .9) x .4] = 2400 + 27000 + 22320
   
A company's history indicates that 25% of its sales are for cash and the rest are on credit.
Collections on credit sales are 20% in the month of the sale, 50% in the next month, 20% the following month, and 10% is uncollectible.
Projected sales for December, January, and February are $70,000, $95,000 and $105,000, respectively.
The February expected cash receipts from all current and prior credit sales is:
 
$100,000
$51,375
$25,688
$72,375
$61,875
 
(105000 x .2) + (95000 x .5) + (70000 x .2) x .75 = 61,875
   
Boulware Company’s budgeted production calls for 6,300 units in October and 9,300 units in November.
Each unit requires 7 pounds (lbs.) of raw material A. Each month’s ending inventory of raw materials should equal 25% of the
following month’s budgeted materials requirements. The October 1 inventory for this material is 11,025 pounds.
What is the budgeted materials purchases for this key material in pounds for October?
 
37,725 lbs.
71,400 lbs.
44,100 lbs.
60,375 lbs.
49,350 lbs
 
(6300 x 7) + (9300 x 7 x .25) - 11025 = 49,350
   
Flagstaff Company has budgeted production units of 9,100 for July and 9,300 for August.
The direct materials requirement per unit is 2 ounces (oz.).
The company has determined that it wants to have safety stock of direct materials on hand at the end of each month to complete 20%
of the units budgeted in the following month. There was 3,640 ounces of direct material in inventory at the start of July.
The total cost of direct materials purchases for the July direct materials budget, assuming the materials cost $1.15 per ounce, is:
 
$25,208.
$16,744.
$20,930.
$20,838.
$21,022.
 
9100 x 2 x 1.15 = 20,930
   
A company's history indicates that 30% of its sales are for cash and the rest are on credit.
Collections on credit sales are 20% in the month of the sale, 50% in the next month, 25% the following month, and 5% is uncollectible.
Projected sales for December, January, and February are $65,000, $90,000 and $100,000, respectively.
The February expected cash receipts from all current and prior credit sales is:
Amount collected in February:
 
$56,875
                                                                 
20% of February credit sales                      20% * (70% * $100,000) =            $14,000              
50% of January credit sales                        50% * (70% * $90,000) =              31,500
25% of December credit sales    25% * (70% * $65,000) =             11,375
 
Total collected in February                                                                                         $56,875              
   
Boulware Company’s budgeted production calls for 6,000 units in October and 9,000 units in November.
Each unit requires 7 pounds (lbs.) of raw material A. Each month’s ending inventory of raw materials should equal 25% of the following month’s budgeted materials requirements. The October 1 inventory for this material is 10,500 pounds. What is the budgeted materials purchases for this key material in pounds for October?
 
47,250 lbs.
 
Materials needed + ending inventory requirements - beginning inventory available = materials to be purchased
(6,000 units x 7 lbs. / unit) + (9,000 units x 7 lbs. / unit * 25%) - 10,500 lbs. = 47,250 lbs
   
For a lamp manufacturing company, the cost of the insurance on its vehicles that deliver lamps to customers is best described as a:

a. prime cost.
B. manufacturing overhead cost.
C. period cost.
D. differential (incremental) cost of a lamp.
   
Each of the following would be a period cost except:

A. the salary of the company president's secretary.
B. the cost of a general accounting office.
C. depreciation of a machine used in manufacturing.
D. sales commissions.
   
Which of the following costs is an example of a period rather than a product cost?

A. Depreciation on production equipment.
B. Wages of salespersons.
C. Wages of production machine operators.
D. Insurance on production equipment.
   
Which of the following would NOT be treated as a product cost for external financial reporting purposes?

A. Depreciation on a factory building.
B. Salaries of factory workers.
C. Indirect labor in the factory.
D. Advertising expenses.
   
The salary of the president of a manufacturing company would be classified as which of the following?

A. Product cost
B. Period cost
C. Manufacturing overhead
D. Direct labor
   
Conversion costs do NOT include:

A. depreciation.
B. direct materials.
C. indirect labor.
D. indirect materials.
   
Variable cost:

A. increases on a per unit basis as the number of units produced increases.
B. remains constant on a per unit basis as the number of units produced increases.
C. remains the same in total as production increases.
D. decreases on a per unit basis as the number of units produced increases.
   
In describing the cost formula equation Y = a + bX, which of the following statements is correct?
 
A. "X" is the dependent variable.
B. "a" is the fixed component.
C. In the high­low method, "b" equals change in activity divided by change in costs.
D. As "X" increases "Y" decreases.
   
Which of the following is the correct formula to compute the predetermined overhead rate?
 
A. Estimated total units in the allocation base divided by estimated total manufacturing overhead costs.
B. Estimated total manufacturing overhead costs divided by estimated total units in the allocation base.
C. Actual total manufacturing overhead costs divided by estimated total units in the allocation base.
D. Estimated total manufacturing overhead costs divided by actual total units in the allocation base.
   
A sporting goods manufacturer budgets production of 51,000 pairs of ski boots in the first quarter and 42,000 pairs in the second
quarter of the upcoming year. Each pair of boots require 2 kg of a key raw material. The company aims to end each quarter with
ending raw materials inventory equal to 15% of the following quarter's material needs. Beginning inventory for this material is
15,300 kg and the cost per kg is $8. What is the budgeted materials purchases cost for the first quarter?
 
$540,000.
$720,000.
$760,500.
$794,400.
$900,000.
   
Wichita Industries' sales are 10% for cash and 90% on credit. Credit sales are collected as follows: 40% in the month of sale, 50% in the next month, and 10% in the following month. On December 31, the accounts receivable balance includes $24,000 from November sales and $54,000 from December sales. Assume that total sales for January and February are budgeted to be $62,000 and $124,000, respectively. What are the expected cash receipts for February from current and past sales?
 
$36,900.
$40,300.
$60,900.
$93,940.
$51,700
   
Hara Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels
of monthly sales volume. The company sells the product for $159.80 per unit.

Sales volume (units)                                         6,000                   7,000
Cost of sales                                                  $ 363,600           $ 424,200
Selling and administrative costs                  $ 531,000           $ 547,400

The best estimate of the total variable cost per unit is:

$77.00
$60.60
$149.10
$138.80
   
Iacob Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels
of monthly sales volume. The company sells the product for $103.40 per unit.

Sales volume (units)                                        5,000                    6,000
Cost of sales                                       $             315,500               $ 378,600
Selling and administrative costs $             162,500               $ 177,600

The best estimate of the total contribution margin when 5,300 units are sold is:
A) $56,710
B) $133,560
C) $41,340
D) $213,590
.

Homework  1.1 1.2  2.1 2.2  3.1 3.2  4.1 4.2 5.1 5.2  6.1 6.2  7.1  7.2  8.1  8.2  9.1   9.2  10.1  10.2  11.1  11.2  12.1 12.2  13.1  13.2  14.1  14.2  15.1   15.2
Learnsmart  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15   |  Exam  1  2  3  4  5  6  7  8  9  10  11  12   13  14  15  |  Final Exam 1   2    Homework Help?