Exam 1: Master Budgeting

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 cash receipts for April would be:

Seventy percent of Parlee Corporation's sales are collected in the month of sale, 25% in the month following sale, and 5% in the second month following sale. The following are budgeted sales data for the company: Total budgeted cash collections in April would be:

All the following are considered to be benefits of participative budgeting, except for:

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. -To attain its desired ending cash balance for July, the company should borrow:

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?

All of Porter Corporation's sales are on account. Sixty percent of the credit sales are collected in the month of sale, 25% in the month following sale, and 10% in the second month following sale. The remainder are uncollectible. The following are budgeted sales data for the company: Cash receipts in April are expected to be:

Caprice Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow: • Sales are budgeted at $350,000 for November, $320,000 for December, and $300,000 for January. • Collections are expected to be 80% in the month of sale, 16% in the month following the sale, and 4% uncollectible. • The cost of goods sold is 70% 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. • The November beginning balance in the accounts receivable account is $78,000. • The November beginning balance in the accounts payable account is $254,000. Required: a. Prepare a Schedule of Expected Cash Collections for November and December. b. Prepare a Merchandise Purchases Budget for November and December.

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

The selling and administrative expense budget of Ruffing Corporation is based on budgeted unit sales, which are 4,800 units for February. The variable selling and administrative expense is $8.10 per unit. The budgeted fixed selling and administrative expense is $71,520 per month, which includes depreciation of $16,800 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the February selling and administrative expense budget should be:

The manufacturing overhead budget at Pendley Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 8,900 direct labor-hours will be required in August. The variable overhead rate is $5.50 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $133,500 per month, which includes depreciation of $30,260. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for August 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 January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

The following are budgeted data for the Bingham Corporation, a merchandising company: -Assuming that the Bingham Corporation had inventory on hand of $70,000 (at cost) on January 1, the purchases for January (at cost) would be:

Starg Corporation, a retailer, plans to sell 25,000 units of Product X during the month of August. If the company has 9,000 units on hand at the start of the month, and plans to have 7,000 units on hand at the end of the month, how many units of Product X must be purchased from the supplier during the month?

The manufacturing overhead budget at Amrein Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 4,900 direct labor-hours will be required in August. The variable overhead rate is $9.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $96,040 per month, which includes depreciation of $7,350. All other fixed manufacturing overhead costs represent current cash flows. The August cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

The Covey Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of the year. The budgeted variable manufacturing overhead rate is $4.00 per direct labor-hour; the budgeted fixed manufacturing overhead is $64,000 per month, of which $18,000 is factory depreciation -If the budgeted direct labor time for December is 4,000 hours, then the average budgeted manufacturing overhead per direct labor-hour is:

LFM Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 3.5 hours of direct labor at the rate of $16.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. -The company plans to sell 31,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 100 and 600 units, respectively. Budgeted direct labor costs for June would be:

Morie Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.75 direct labor-hours. The direct labor rate is $8.10 per direct labor-hour. The production budget calls for producing 2,000 units in March and 2,300 units in April. 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 1,760 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?

Carter Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow: • Sales are budgeted at $380,000 for November, $390,000 for December, and $400,000 for January. • Collections are expected to be 70% in the month of sale, 27% in the month following the sale, and 3% uncollectible. • The cost of goods sold is 65% of sales. • The company desires to have an ending merchandise inventory equal to 80% of the following 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 $22,000. • Monthly depreciation is $20,000. • Ignore taxes. -The accounts receivable balance, net of uncollectible accounts, at the end of December would be:

Bracken Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: • Sales are budgeted at $330,000 for November, $340,000 for December, and $340,000 for January. • Collections are expected to be 80% in the month of sale, 17% in the month following the sale, and 3% uncollectible. • The cost of goods sold is 75% of sales. • 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. • Other monthly expenses to be paid in cash are $21,800. • Monthly depreciation is $19,000. • Ignore taxes. -The difference between cash receipts and cash disbursements for December would be:

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