Reference no: EM131580003
Q1) Woodsman Inc. produces a variety of wood finishing products including litres of varnish that it manufactures and packages under its own name. The company has computed the required production of litres of varnish it will need for the first three months of 2009 as follows:
January - 300 000 litres
February - 340 000 litres
March - 400 000 litres
Each litre of varnish requires 10 grams of a special chemical. This chemical costs $.25 per gram. The company has determined that it needs 20 per cent of next month's raw material needs on hand at the end of each month.
Calculate the cost of the direct material that should be purchased in February.
Q2) Camden Products Inc. manufacturers travel accessories. The company's controller has prepared the following static budget of one of the product lines for the month of November:
Estimated production - 1000 units
Direct labour per unit - 12 minutes
Direct labour required for estimated production - 200 hours
Average direct labour rate per hour - $9
Estimated direct labour cost - $1800
Actual production during November was 1 300 units and actual direct labour cost was $2520.
If Camden prepares a flexible budget for November, compute direct labour cost is estimated.
Q3) Refer to the Jones Manufacturing information below.
Jones Manufacturing sells unique decorative water fountains. The company has prepared the following forecast for the first quarter of 2010:
January 1000 units
February 1400 units
March 2000 units
Ending inventory at 31 December 2009 was budgeted at 80 units. Management would like the desired quantity of finished goods inventory at the end of each month to be equal to 10 per cent of next month's budgeted unit sales. April's sales are projected to be 1600 units.
Each completed unit of finished product requires 3 pounds of compounding material at a cost of $2.00 per pound. The company has determined that it needs 15 per cent of next month's raw material needs on hand at the end of each month.
Calculate the total required production of water fountains for the first quarter of 2009.
Q4) Ingalls Mercantile Inc. sells bolts of fabric to retailers for $80 per bolt. The company's accountant has prepared the following sales forecast (in bolts) for the first quarter of 2009:
January - 600 bolts
February - 1000 bolts
March - 700 bolts
Historically, the cash collection of sales has been as follows: 60 per cent in the month of sale, 30 per cent in the month following sale, and 9 per cent in the second month following sale.
Cash receipts for March are expected to be:
1. $182 160
2. $57 840
3. $33 600
4. $61 920