Exam 8: Profit Planning

For May, Young Corporation has budgeted its cash receipts at $125, 000 and its cash disbursements at $138, 000.The company's cash balance on May 1 is $17, 000.If the desired May 31 cash balance is $20, 000, then how much cash must the company borrow during the month (before considering any interest payments)?

Bracken Corporation is a small wholesaler of gourmet food products.Data regarding the store's operations follow: o Sales are budgeted at $330, 000 for November, $340, 000 for December, and $340, 000 for January. O Collections are expected to be 80% in the month of sale, 17% in the month following the sale, and 3% uncollectible. O The cost of goods sold is 75% of sales. O The company would like to maintain ending merchandise inventories equal to 70% of the next month's cost of goods sold.Payment for merchandise is made in the month following the purchase. O Other monthly expenses to be paid in cash are $21, 800. O Monthly depreciation is $19, 000. O Ignore taxes. Expected cash collections in December are:

Poriss Corporation makes and sells a single product called a Yute.The company is in the process of preparing its Selling and Administrative Expense Budget for the last quarter of the year.The following budget data are available: All of these expenses (except depreciation)are paid in cash in the month they are incurred. If the company has budgeted to sell 19, 000 Yutes in November, then the total budgeted selling and administrative expenses for November would be:

The selling and administrative expense budget of Gullette Corporation is based on the number of units sold, which are budgeted to be 2, 700 units in April.The variable selling and administrative expense is $1.90 per unit.The budgeted fixed selling and administrative expense is $35, 640 per month, which includes depreciation of $7, 290.The remainder of the fixed selling and administrative expense represents current cash flows. Required: Prepare the selling and administrative expense budget for April.

Roberts Corporation manufactures home cleaning products.One of the products, Quickclean, requires 2 pounds of Material A and 5 pounds of Material B per unit manufactured.Material A is purchased from the supplier for $0.30 per pound and Material B is purchased for $0.50 per pound.The finished goods inventory on hand at the end of each month should equal 4, 000 units plus 25% of the next month's sales.The raw materials inventory on hand at the end of each month (for either Material A or Material B)should equal 80% of the following month's production needs. The production budget calls for 26, 000 units of Quickclean to be manufactured in June and 32, 000 units of Quickclean to be manufactured in July.On May 31 there will be 41, 600 pounds of Material A and 104, 000 pounds of Material B in inventory. The number of pounds of Material B to be purchased during June would be:

Planning involves gathering feedback to ensure that the plan is being properly executed or modified as circumstances change.

Dilbert Farm Supply is located in a small town in the rural west.Data regarding the store's operations follow: o Sales are budgeted at $260, 000 for November, $230, 000 for December, and $210, 000 for January. O Collections are expected to be 80% in the month of sale, 19% in the month following the sale, and 1% uncollectible. O The cost of goods sold is 65% of sales. O The company desires to have an ending merchandise inventory at the end of each month equal to 60% of the next month's cost of goods sold.Payment for merchandise is made in the month following the purchase. O Other monthly expenses to be paid in cash are $20, 300. O Monthly depreciation is $20, 000. O Ignore taxes. The cash balance at the end of December would be:

Cashan Corporation makes and sells a product called a Miniwarp.One Miniwarp requires 1.5 kilograms of the raw material Jurislon.Budgeted production of Miniwarps for the next five months is as follows: The company wants to maintain monthly ending inventories of Jurislon equal to 30% of the following month's production needs.On July 31, this requirement was not met since only 10, 400 kilograms of Jurislon were on hand.The cost of Jurislon is $4.00 per kilogram.The company wants to prepare a Direct Materials Purchase Budget for the next five months. The desired ending inventory of Jurislon for September is:

Which of the following might be included as a disbursement on a cash budget?

The direct labor budget is based on:

The TS Corporation has budgeted sales for the year as follows: The ending inventory of finished goods for each quarter should equal 25% of the next quarter's budgeted sales in units.The finished goods inventory at the start of the year is 2, 500 units.Four pounds of raw materials are required for each unit produced.Raw materials on hand at the start of the year total 4, 200 pounds.The raw materials inventory at the end of each quarter should equal 10% of the next quarter's production needs in material. Scheduled production for the third quarter should be:

Only variable manufacturing overhead costs are included in the manufacturing overhead budget.

The first budget a company prepares in a master budget is the production budget.

The direct labor budget shows the direct labor-hours required to produce the desired ending inventory.

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:

The LFG Corporation makes and sells a single product, Product T.Each unit of Product T requires 1.4 direct labor-hours at a rate of $9.80 per direct labor-hour.The direct labor workforce is fully adjusted each month to the required workload.LFG Corporation needs to prepare a Direct Labor Budget for the second quarter of next year. The budgeted direct labor cost per unit of Product T is closest to:

For July, White Corporation has budgeted production of 6, 000 units.Each unit requires 0.10 direct labor-hours at a cost of $8.50 per direct labor-hour.How much will White Corporation budget for labor in July?

The Adams Corporation, a merchandising firm, has budgeted its activity for November according to the following information: • Sales at $450, 000, all for cash. • Merchandise inventory on October 31 was $200, 000. • The cash balance November 1 was $18, 000. • Selling and administrative expenses are budgeted at $60, 000 for November and are paid for in cash. • Budgeted depreciation for November is $25, 000. • The planned merchandise inventory on November 30 is $230, 000. • The cost of goods sold is 70% of the selling price. • All purchases are paid for in cash. • There is no interest expense or income tax expense. The budgeted cash disbursements for November are:

JT Department Store expects to generate the following sales for the next three months: JT's cost of gods sold is 60% of sales dollars.At the end of each month, JT wants a merchandise inventory balance equal to 20% of the following month's expected cost of goods sold.What dollar amount of merchandise inventory should JT plan to purchase in August?

Shocker Corporation's sales budget shows quarterly sales for the next year as follows: Unit sales Corporation policy is to have a finished goods inventory at the end of each quarter equal to 20% of the next quarter's sales.Budgeted production for the second quarter of the next year would be: