Exam 9: Budgeting

Pardise Company plans the following beginning and ending inventory levels (in units) for July: July 1 July 31 Raw material 40,000 Work in process 10,000 10,000 Finished goods 80,000 50,000 Two units of raw material are needed to produce each unit of finished product. -If 500,000 finished units were to be manufactured during July,what would be the units of raw material needed to be purchased?

TabComp Inc.is a retail distributor for MZB-33 computer hardware and related software.TabComp prepares annual sales forecasts,of which the first six months of the coming year are presented below: Hardware units Hardware dollars Software Total sales January 130 \ 390,000 \ 160,000 \ 550,000 February 12 360,000 140,000 500,000 March 110 330,000 150,000 480,000 Apri1 90 270,000 130,000 400,000 May 100 300,000 125,000 425,000 Tune 125 375,000 225,000 600,000 Cash sales account for 25% of TabComp's total sales,30% of the total sales are paid by bank credit card,and the remaining 45% are on open account (TabComp's own charge accounts).The cash and bank credit card sale payments are received in the month of the sale.Bank credit card sales are subject to a 4% discount,which is deducted immediately.The cash receipts for sales on open account are 70% in the month following the sale and 28% in the second month following the sale; the remaining are uncollectible. TabComp's month-end inventory requirements for computer hardware units are 30% of the next month's sales.The units must be ordered two months in advance due to long lead times quoted by the manufacturer. Required: A)Calculate the cash that TabComp can expect to collect during April.Show all of your calculations. B)Determine the number of computer hardware units that should be ordered in January.Show all of your calculations.

A production budget is to a manufacturing firm as a merchandise purchases budget is to a merchandising firm.

Walsh Company expects sales of Product W to be 60,000 units in April,75,000 units in May,and 70,000 units in June.The company desires that the inventory on hand at the end of each month be equal to 40% of the next month's expected unit sales.Due to excessive production during March,there were 25,000 units of Product W in the ending inventory on March 31.Given this information,what should be Walsh Company's production of Product W for the month of April?

A cash budget by quarters for the Carney Company is given below (note that some data are missing). Missing data amounts have been keyed with either question marks or lowercase letters (a, b, c, etc.); these lowercase letters will be referred to in the questions that follow. (It may be necessary to calculate a value for items where a question mark appears.) A zero amount is designated by a dash (-). The company requires a minimum cash balance of at least $10,000 to start a quarter. All data are in thousands of dollars. Carney Corporation Cash Budget -What is the repayment (including interest)of financing during the second quarter (item d),in thousands of dollars?

Justin's Plant Store, a retailer, started operations on January 1. On that date, the only assets were $16,000 in cash and $3,500 in merchandise inventory. For purposes of budget preparation, assume that the company's cost of goods sold is 60% of sales. Expected sales for the first four months appear below: Expected Sales January \ 10,000 February 24,000 March 16,000 April 25,000 The company desires that the merchandise inventory on hand at the end of each month be equal to 50% of the next month's merchandise sales (stated at cost). All purchases of merchandise inventory must be paid in the month of purchase. Sixty percent of all sales should be for cash; the balance will be on credit. Seventy-five percent of the credit sales should be collected in the month following the month of sale, with the balance collected in the following month. Variable operating expenses should be 10% of sales, and fixed expenses (all depreciation) should be $3,000 per month. Cash payments for the variable operating expenses are made during the month the expenses are incurred. -What would be the accounts receivable balance that would appear in the March 31 budgeted balance sheet?

A cash budget by quarters for the Carney Company is given below (note that some data are missing). Missing data amounts have been keyed with either question marks or lowercase letters (a, b, c, etc.); these lowercase letters will be referred to in the questions that follow. (It may be necessary to calculate a value for items where a question mark appears.) A zero amount is designated by a dash (-). The company requires a minimum cash balance of at least $10,000 to start a quarter. All data are in thousands of dollars. Carney Corporation Cash Budget -What are the total collections from customers for the year,in thousands of dollars?

Pardise Company plans the following beginning and ending inventory levels (in units) for July: July 1 July 31 Raw material 40,000 Work in process 10,000 10,000 Finished goods 80,000 50,000 Two units of raw material are needed to produce each unit of finished product. -If Pardise Company plans to sell 480,000 units during July,what would be the number of units it would have to manufacture during July?

Sales forecasts are drawn up after the cash budget has been completed because it is only at that time that the funds available for marketing are known.

Capelli Hospital bases its budgets on patient-visits. The hospital's static budget for August appears below: Budgeted number of patient-visits 8,300 Budgeted variable overhead costs: Supplies (@ \5 .00 per patient-visit) \ 41,500 Laundry (@ \7 .30 per patient-visit) Total variable overhead cost 102,090 Budgeted fixed overhead costs: Wages and salaries 60,590 Occupancy costs Total fixed overhead cost 133,630 Total budgeted overhead cost \ 235,720 -What should be the total variable overhead cost at an activity level of 9,300 patient-visits per month?

In companies that have "no lay-off" policies,the total direct labour cost for a budget period is computed by taking the total direct labour hours needed to make the budgeted output of completed units and multiplying them by the direct labour wage rate.

Which of the following variances in a comprehensive performance report using the flexible budget concept is the most appropriate for measuring efficiency of operations?

The Willsey Merchandise Company has budgeted $40,000 in sales for the month of December.The company's cost of goods sold is 30% of sales.If the company has budgeted to purchase $18,000 in merchandise during December,what is the budgeted change in inventory levels over the month of December?

What is the budget or schedule that provides necessary input data for the direct labour budget?

Pardee Company plans to sell 12,000 units during the month of August.If the company has 2,500 units on hand at the start of the month,and plans to have 2,000 units on hand at the end of the month,how many units must be produced during the month?

Tilson Company has projected sales and production in units for the second quarter of the coming year as follows: Apri May June Sales 55,000 45,000 65,000 Production 65,000 55,000 55,000 Cash-related production costs are budgeted at $7 per unit produced.Of these production costs,40% are paid in the month in which they are incurred and the balance in the following month.Selling and administrative expenses will amount to $110,000 per month.The accounts payable balance on March 31 totals $193,000,which will be paid in April. All units are sold on account for $16 each.Cash collections from sales are budgeted at 60% in the month of sale,30% in the month following the month of sale,and the remaining 10% in the second month following the month of sale.Accounts receivable on April 1 totalled $520,000 ($100,000 from February's sales and the remainder from March). Required: a)Prepare a schedule for each month showing budgeted cash disbursements for Tilson Company. b)Prepare a schedule for each month showing budgeted cash receipts for Tilson Company.

James Enterprises has budgeted unit sales for the next four months as follows: November 4,800 units December 5,800 units January 6,400 units February 5,200 units The ending inventory for each month should be equal to 15% of the next month's sales in units. The inventory on October 31 was below this level and contained only 600 units. -What is the desired ending inventory for December?

James Enterprises has budgeted unit sales for the next four months as follows: November 4,800 units December 5,800 units January 6,400 units February 5,200 units The ending inventory for each month should be equal to 15% of the next month's sales in units. The inventory on October 31 was below this level and contained only 600 units. -What is the budgeted net income for April?

Barley Enterprises has budgeted unit sales for the next four months as follows: October 4,800 units November 5,800 units December 6,400 units January 5,200 units The ending inventory for each month should be equal to 15% of the next month's sales in units. The inventory on September 30 was below this level and contained only 600 units. -What are the total units to be produced in October?

The participative budget can be a very effective control device in an organization.