Exam 1: Master Budgeting

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. -Assume that on January 1 the inventory of Quickclean was 8,000 units. Expected sales in January are 14,000 units and expected sales in February are 18,000 units. The number of units needed to be produced in January would be:

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 16,000 Yutes in December, then the budgeted total cash disbursements for selling and administrative expenses for December would be:

The Khaki Corporation has the following budgeted sales data: The regular pattern of collection of credit sales is 40% in the month of sale, 50% in the month following sale, and the remainder in the second month following the month of sale. There are no bad debts. -The budgeted accounts receivable balance on February 28 would be:

The manufacturing overhead budget of Paparella Corporation is based on budgeted direct labor-hours. The November direct labor budget indicates that 6,000 direct labor-hours will be required in that month. The variable overhead rate is $2.00 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $79,200 per month, which includes depreciation of $21,000. All other fixed manufacturing overhead costs represent current cash flows. Required: a. Determine the cash disbursements for manufacturing overhead for November. Show your work! b. Determine the predetermined overhead rate for November. Show your work!

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 cash budget is usually prepared after the budgeted income statement.

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:

Cartier Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The variable overhead rate is $5.80 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $39,930 per month, which includes depreciation of $12,870. All other fixed manufacturing overhead costs represent current cash flows. The direct labor budget indicates that 3,300 direct labor-hours will be required in April. -The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for April should be:

Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow: • Sales are budgeted at $360,000 for November, $380,000 for December, and $350,000 for January. • Collections are expected to be 75% in the month of sale, 20% in the month following the sale, and 5% uncollectible. • The cost of goods sold is 65% of sales. • The company desires an ending merchandise inventory equal to 60% of the cost of goods sold in the following month. • Payment for merchandise is made in the month following the purchase. • Other monthly expenses to be paid in cash are $21,900. • Monthly depreciation is $20,000. • Ignore taxes. Required: a. Prepare a Schedule of Expected Cash Collections for November and December. b. Prepare a Merchandise Purchases Budget for November and December. c. Prepare Cash Budgets for November and December. d. Prepare Budgeted Income Statements for November and December. e. Prepare a Budgeted Balance Sheet for the end of December.

Noel 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 400 units. The company needs to prepare a production budget for the second quarter of the year. -The desired ending inventory for August is:

Dilbert Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: -The cost of December merchandise purchases would be:

The production department of Tadris Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year. Each unit requires 0.25 direct labor-hours at $18.00 per hour. Required: Prepare a direct labor budget for the upcoming fiscal year, assuming that the direct labor work force is adjusted each quarter to match the number of hours required to produce the budgeted production.

The following information was taken from the production budget of Paeke Corporation for next quarter: How many units is the company expecting to sell in the month of February?

On November 1, Barnes Corporation has 8,000 units of Product A on hand. During the month, the company plans to sell 30,000 units of Product A, and plans to have 6,500 units on hand at end of the month. How many units of Product A must be produced during the month?

di Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year: At Adi, 30% of raw materials purchases are normally paid for in the month of purchase. The remaining 70% is paid for in the month following the purchase. -If the budgeted direct labor cost for February is $162,360, then the budgeted production of Clops for February is:

Harris, Inc., has budgeted sales in units for the next five months as follows: Past experience has shown that the ending inventory for each month should be equal to 20% of the next month's sales in units. The inventory on May 31 contained 1,880 units. The company needs to prepare a production budget for the next five months. -The beginning inventory for September should be:

The manufacturing overhead budget at Cardera Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,300 direct labor-hours will be required in January. The variable overhead rate is $1.00 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $28,060 per month, which includes depreciation of $4,600. All other fixed manufacturing overhead costs represent current cash flows. -The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for January should be:

Home Corporation will open a new store on January 1. Based on experience from its other retail outlets, Home Corporation is making the following sales projections: Home Corporation estimates that 70% of the credit sales will be collected in the month following the month of sale, with the balance collected in the second month following the month of sale. -In a cash budget for April, the total cash receipts will be:

Rogers Corporation is preparing its cash budget for July. The budgeted beginning cash balance is $25,000. Budgeted cash receipts total $141,000 and budgeted cash disbursements total $139,000. The desired ending cash balance is $30,000. -The excess (deficiency) of cash available over disbursements for April will be:

Davey Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of the year. The budgeted variable manufacturing overhead rate is $3.00 per direct labor-hour; the budgeted fixed manufacturing overhead is $66,000 per month, of which $10,000 is factory depreciation. -If the budgeted direct labor time for November is 9,000 hours, then the total budgeted cash disbursements for manufacturing overhead for November must be: