Exam 8: Master Budgeting

Darke Corporation makes one product and has provided the following information:Budgeted unit sales for October, November, and December are 7,600, 9,000, and 10,100 units respectively.The ending finished goods inventory equals 40% of the following month's sales.Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $1.00 per pound.The direct labor wage rate is $19.00 per hour. Each unit of finished goods requires 3.0 direct labor-hours.Manufacturing overhead is entirely variable and is $11.00 per direct labor-hour.The estimated finished goods inventory balance at the end of November is closest to:

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:Sales are budgeted at $290,000 for November, $270,000 for December, and $260,000 for January.Collections are expected to be 40% in the month of sale and 60% in the month following the sale.The cost of goods sold is 75% of sales.The company would like to maintain ending merchandise inventories equal to 65% of the next 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 $23,500.Monthly depreciation is $14,500.Ignore taxes. Expected cash collections in December are:

Mumbower Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations:

The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7,200 direct labor-hours will be required in May. The variable overhead rate is $7.70 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $139,680 per month, which includes depreciation of $24,850. 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:

Davis Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of the year. The budgeted variable manufacturing overhead rate is $1.70 per direct labor-hour; the budgeted fixed manufacturing overhead is $116,000 per month, of which $30,000 is factory depreciation.If the budgeted direct labor time for December is 4,000 hours, then the predetermined manufacturing overhead per direct labor-hour for December would be:

The following information relates to Mapfes Manufacturing Corporation for next quarter: How many units should the company plan on producing for the month of February?

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow:Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January.Collections are expected to be 65% in the month of sale and 35% in the month following the sale.The cost of goods sold is 80% of sales.The company desires to have an ending merchandise inventory at the end of each month equal to 70% of the next 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 $21,100.Monthly depreciation is $21,000.Ignore taxes. December cash disbursements for merchandise purchases would be:

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:

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 required production for May is closest to:

Knappert Corporation makes one product and has provided the following information:Each unit of finished goods requires 3 pounds of raw materials. The raw materials cost $5.00 per pound.The direct labor wage rate is $24.00 per hour. Each unit of finished goods requires 2.8 direct labor-hours.Manufacturing overhead is entirely variable and is $11.00 per direct labor-hour.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:

Zolezzi Incorporated is preparing its cash budget for March. The budgeted beginning cash balance is $30,000. Budgeted cash receipts total $101,000 and budgeted cash disbursements total $90,000. The desired ending cash balance is $85,000. The company can borrow up to $60,000 at any time from a local bank, with interest not due until the following month.Required:Prepare the company's cash budget for March in good form. Make sure to indicate what borrowing, if any, would be needed to attain the desired ending cash balance.

Petrini 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 $110. Budgeted unit sales for January, February, March, and April are 7,500, 10,600, 12,000, and 11,700 units, respectively. All sales are on credit.Regarding credit sales, 30% are collected in the month of the sale and 70% in the following month.The ending finished goods inventory equals 30% 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 5 pounds of raw materials. The raw materials cost $4.00 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 $23.00 per hour. Each unit of finished goods requires 2.6 direct labor-hours.Manufacturing overhead is entirely variable and is $8.00 per direct labor-hour.The variable selling and administrative expense per unit sold is $1.70. The fixed selling and administrative expense per month is $70,000.The estimated unit product cost is closest to:

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.If the company estimates that it will need 55,480 pounds of raw material to satisfy production needs in March, then the raw materials inventory balance at the end of February should be closest to:

Depasquale Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.41 direct labor-hours. The direct labor rate is $8.10 per direct labor-hour. The production budget calls for producing 5,000 units in May and 5,400 units in June. If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months?

Botz 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 $94. Budgeted unit sales for April, May, June, and July are 8,200, 10,600, 10,100, and 15,200 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 30% of the following month's sales.> The ending raw materials inventory equals 40% of the following month's raw materials production needs. Each unit of finished goods requires 2 pounds of raw materials. The raw materials cost $1.00 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 $23.00 per hour. Each unit of finished goods requires 2.4 direct labor-hours.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 23,260 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 $19,064, 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?

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 direct labor cost for February is closest to:

The production department of Tarre Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year.

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.If 54,480 pounds of raw materials are required for production in June, then the budgeted raw material purchases for May is closest to:

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:Sales are budgeted at $330,000 for November, $310,000 for December, and $300,000 for January.Collections are expected to be 50% in the month of sale and 50% in the month following the sale.The cost of goods sold is 75% of sales.The company would like to maintain ending merchandise inventories equal to 65% of the next 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 $23,900.Monthly depreciation is $14,900.Ignore taxes. December cash disbursements for merchandise purchases would be:

The Charade Corporation is preparing its Manufacturing Overhead budget for the fourth quarter of the year. The budgeted variable manufacturing overhead is $5.00 per direct labor-hour; the budgeted fixed manufacturing overhead is $75,000 per month, of which $15,000 is factory depreciation.If the budgeted direct labor time for December is 8,000 hours, then average budgeted manufacturing overhead per direct labor-hour is closest to: