Reference no: EM13509006

1. Avril Company makes collections on sales according to the following schedule:

50% in the month of sale
47% in the month following sale
3% in the second month following sale

The following sales are expected:

Expected Sales
January $200,000
February $170,000
March $160,000

Cash collections in March should be budgeted to be:
A. $165,900
B. $160,600
C. $160,000
D. $159,900

2. Sartain Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.

Beginning Inventory Ending Inventory
Finished goods (units) 27,000 77,000
Raw material (grams) 57,000 47,000

Each unit of finished goods requires 3 grams of raw material.

If the company plans to sell 740,000 units during the year, the number of units it would have to manufacture during the year would be:
A. 740,000 units
B. 790,000 units
C. 817,000 units
D. 683,000 units

3. LHU Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.9 hours of direct labor at the rate of $25.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June.

The budgeted direct labor cost per unit of Product WZ would be:
A. $25.00
B. $72.50
C. $6.80
D. $41.70

4. Mosbey Inc. is working on its cash budget for June. The budgeted beginning cash balance is $27,000. Budgeted cash receipts total $199,000 and budgeted cash disbursements total $198,000. The desired ending cash balance is $47,000. The excess (deficiency) of cash available over disbursements for June will be:
A. $28,000
B. $226,000
C. $26,000
D. $1,000

5. The manufacturing overhead budget at Mahapatra Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 8,900 direct labor-hours will be required in May. The variable overhead rate is $9.10 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $112,140 per month, which includes depreciation of $18,250. All other fixed manufacturing overhead costs represent current cash flows.

The May cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
A. $80,990
B. $174,880
C. $93,890
D. $193,130

6. Shuck Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 8,000 direct labor-hours will be required in May. The variable overhead rate is $1.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $100,540 per month, which includes depreciation of $8,810. All other fixed manufacturing overhead costs represent current cash flows. The May cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
A. $102,930
B. $11,200
C. $111,740
D. $91,730

7. Mitchell Company had the following budgeted sales for the last half of last year:

Cash Sales Credit Sales
July $60,000 $160,000
August $65,000 $180,000
September $55,000 $140,000
October $60,000 $155,000
November $70,000 $210,000
December $90,000 $450,000

The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled:

Collections on credit sales:
45% in month of sales
35% in month of following sales
20.0% in second month following sales

Assume that the accounts receivable balance on July 1 was $80,000. Of this amount, $55,000 represented uncollected June sales and $25,000 represented uncollected May sales. Given these data, the total cash collected during July would be:
A. $192,000
B. $100,000
C $270,000
D. $250,000

8. Veltri Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.71 direct labor-hours. The direct labor rate is $10.00 per direct labor-hour. The production budget calls for producing 7,700 units in October and 7,500 units in November. The company guarantees its direct labor workers a 40-hour paid work week. With the number of workers currently employed, that means that the company is committed to paying its direct labor work force for at least 5,480 hours in total each month even if there is not enough work to keep them busy. What would be the total combined direct labor cost for the two months?
A. $109,470.00
B. $109,600.00
C. $108,050.00
D. $107,920.00

9. Walsh Company expects sales of Product W to be 59,000 units in April, 85,000 units in May and 80,000 units in June. The company desires that the inventory on hand at the end of each month be equal to 20% of the next month's expected unit sales. Due to excessive production during March, on March 31 there were 35,000 units of Product W in the ending inventory. Given this information, Walsh Company's production of Product W for the month of April should be:
A. 59,000 units
B. 41,000 units
C. 85,000 units
D. 32,200 units

10. The manufacturing overhead budget at Mahapatra Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 9,800 direct labor-hours will be required in May. The variable overhead rate is $8.20 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $141,120 per month, which includes depreciation of $18,130. All other fixed manufacturing overhead costs represent current cash flows.

The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for May should be:
A. $8.20
B. $22.60
C. $14.40
D. $20.30