Exam 7: Profit Planning

Sartain 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. -If the company plans to sell 670,000 units during the year,the number of units it would have to manufacture during the year would be:

Porl 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 December,then the budgeted total cash disbursements for selling and administrative expenses for December would be:

Veltri Corporation is working on its direct labor budget for the next two months.Each unit of output requires 0.77 direct labor-hours.The direct labor rate is $11.20 per direct labor-hour.The production budget calls for producing 7,100 units in October and 6,900 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?

Balmforth Products, Inc. makes and sells a single product called a Bik. It takes three yards of Material A to make one Bik. Budgeted production of Biks for the next five months is as follows: The company wants to maintain monthly ending inventories of Material A equal to 20% of the following month's production needs. On January 31, this target had not been attained since only 2,000 yards of Material A were on hand. The cost of Material A is $0.80 per yard. The company wants to prepare a Direct Materials Purchases Budget. -The desired ending inventory of Material A for the month of March is:

Sartain 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. -How much of the raw material should the company purchase during the year?

One difficulty with self-imposed budgets is that they are not subject to any type of review.