Exam 8: Master Budgeting

The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 5,800 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 $104,400 per month, which includes depreciation of $8,120. 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:

Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Credit sales are collected:30% in the month of the sale70% in the following monthRaw materials purchases are paid:30% in the month of purchase70% in the following monthThe ending finished goods inventory should equal 30% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs.The estimated net operating income (loss) for February is closest to:

Michard 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 $125. Budgeted unit sales for April, May, June, and July are 7,600, 10,500, 13,800, and 12,900 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 20% of the following month's sales.The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.00 per pound.Regarding raw materials purchases, 30% are paid for in the month of purchase and 70% in the following month.The direct labor wage rate is $25.00 per hour. Each unit of finished goods requires 3.0 direct labor-hours.The variable selling and administrative expense per unit sold is $3.40. The fixed selling and administrative expense per month is $80,000.The budgeted sales for May is closest to:

The manufacturing overhead budget of Reigle Corporation is based on budgeted direct labor-hours. The February direct labor budget indicates that 5,800 direct labor-hours will be required in that month. The variable overhead rate is $4.60 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $82,360 per month, which includes depreciation of $16,820. All other fixed manufacturing overhead costs represent current cash flows.Required:a. Determine the cash disbursements for manufacturing overhead for February.b. Determine the predetermined overhead rate for February.

Jeanclaude Corporation produces and sells one product. The budgeted selling price per unit is $105. Budgeted unit sales for July, August, September, and October are 7,400, 7,500, 13,800, and 15,300 units, respectively. All sales are on credit. Regarding credit sales, 40% are collected in the month of the sale and 60% in the following month.The budgeted accounts receivable balance at the end of August is closest to:

The following are budgeted data: One pound of material is required for each finished unit. The inventory of materials at the end of each month should equal 20% of the following month's production needs. Purchases of raw materials for February would be budgeted to be:

Parwin Corporation plans to sell 43,000 units during August. If the company has 18,000 units on hand at the start of the month, and plans to have 19,000 units on hand at the end of the month, how many units must be produced during the month?

Sevenbergen Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Credit sales are collected:40% in the month of the sale60% in the following monthRaw materials purchases are paid:30% in the month of purchase70% in the following monthThe ending finished goods inventory should equal 20% of the following month's sales. The ending raw materials inventory should equal 30% of the following month's raw materials production needs.The estimated direct labor cost for August is closest to:

Smith Corporation makes and sells a single product called a Pod. Each Pod requires 1.4 direct labor-hours at $9.60 per direct labor-hour. The direct labor workforce is fully adjusted each month to the required workload. Smith Corporation is preparing a Direct Labor Budget for the second quarter of the year.In June the company has budgeted to produce 22,000 Pods. Budgeted direct labor costs incurred in June would be:

The LaPann Corporation has obtained the following sales forecast data: The regular pattern of collection of credit sales is 20% in the month of sale, 70% in the month following the month of sale, and the remainder in the second month following the month of sale. There are no bad debts.The budgeted cash receipts for October would be:

In the merchandise purchases budget, the required purchases (in units) for a period can be determined by subtracting the beginning merchandise inventory (in units) from the budgeted sales (in units) and desired ending merchandise inventory (in units).

Marst Corporation's budgeted production in units and budgeted raw materials purchases over the next three months are given below: Four pounds of raw materials are required to produce one unit of product. The company wants raw materials on hand at the end of each month equal to 25% of the following month's production needs. The company is expected to have 71,700 pounds of raw materials on hand on January 1. Budgeted production for February should be:

Carver Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow:Sales are budgeted at $350,000 for November, $320,000 for December, and $300,000 for January.Collections are expected to be 90% in the month of sale and 10% in the month following the sale.The cost of goods sold is 75% of sales.The company desires to have an ending merchandise inventory equal to 60% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase.Other monthly expenses to be paid in cash are $24,700.Monthly depreciation is $16,000.Ignore taxes. The cash balance at the end of December would be:

Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year. Each unit of finished goods requires 2 grams of raw material. The company plans to sell 720,000 units during the year.The number of units the company would have to manufacture during the year would be:

Crocetti Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Credit sales are collected:40% in the month of the sale60% in the following monthThe budgeted accounts receivable balance at the end of February is closest to:

Roberts Enterprises has budgeted sales in units for the next five months as follows: Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on May 31 contained 450 units. The company needs to prepare a production budget for the second quarter of the year.The total number of units to be produced in July is:

Which of the following statements is NOT correct concerning the Manufacturing Overhead Budget?

The Charade Corporation is preparing its Manufacturing Overhead budget for the fourth quarter of the year. The budgeted variable manufacturing overhead is $4 per direct labor-hour; the budgeted fixed manufacturing overhead is $94,000 per month, of which $16,900 is factory depreciation.If the budgeted direct labor time for November is 8,900 hours, then the total budgeted manufacturing overhead for November is:

Luchini 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 $111. Budgeted unit sales for April, May, June, and July are 7,100, 10,100, 13,300, and 14,000 units, respectively. All sales are on credit.Regarding credit sales, 40% are collected in the month of the sale and 60% in the following month.The ending finished goods inventory equals 10% of the following month's sales.The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $5.00 per pound.Regarding raw materials purchases, 40% are paid for in the month of purchase and 60% in the following month.The direct labor wage rate is $18.00 per hour. Each unit of finished goods requires 2.9 direct labor-hours.Variable manufacturing overhead is $7.00 per direct labor-hour. Fixed manufacturing overhead is zero.If 66,850 pounds of raw materials are required for production in June, then the budgeted raw material purchases for May is closest to:

Carver Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow:Sales are budgeted at $350,000 for November, $320,000 for December, and $300,000 for January.Collections are expected to be 90% in the month of sale and 10% in the month following the sale.The cost of goods sold is 75% of sales.The company desires to have an ending merchandise inventory equal to 60% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase.Other monthly expenses to be paid in cash are $24,700.Monthly depreciation is $16,000.Ignore taxes. The net income for December would be: