116) Endpoint Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The
variable overhead rate is $1.30 per direct labor-hour. The company’s budgeted fixed
manufacturing overhead is $98,900 per month, which includes depreciation of $19,780. All other
fixed manufacturing overhead costs represent current cash flows. The September direct labor
budget indicates that 8,600 direct labor-hours will be required in that month.
Required:
a. Determine the cash disbursement for manufacturing overhead for September.
b. Determine the predetermined overhead rate for September.
117) The manufacturing overhead budget of Waverly Corporation is based on budgeted direct
labor-hours. The June direct labor budget indicates that 5,800 direct labor-hours will be required
in that month. The variable overhead rate is $7.70 per direct labor-hour. The company’s budgeted
fixed manufacturing overhead is $111,360 per month, which includes depreciation of $17,400.
All other fixed manufacturing overhead costs represent current cash flows.
Required:
a. Determine the cash disbursement for manufacturing overhead for June.
b. Determine the predetermined overhead rate for June.
118) Ng Inc. bases its marketing and administrative expense budget on the number of units sold.
The variable marketing and administrative expense is $4.30 per unit. The budgeted fixed
marketing and administrative expense is $30,240 per month, which includes depreciation of
$3,510. The remainder of the fixed marketing and administrative expense represents current cash
flows. The sales budget shows 2,700 units are planned to be sold in April.
Required:
Prepare a schedule showing total marketing and administrative expenses for April, as well as the
cash disbursements for marketing and administrative expenses.
119) The marketing and administrative expense budget of Kimble Corporation is based on the
number of units sold, which are budgeted to be 2,500 units in January. The variable marketing
and administrative expense is $4.40 per unit. The budgeted fixed marketing and administrative
expense is $35,750 per month, which includes depreciation of $4,000. The remainder of the fixed
marketing and administrative expense represents current cash flows.
Required:
Prepare a schedule showing total marketing and administrative expenses for January, as well as
the cash disbursements for marketing and administrative expenses.
120) Rocket Plating Company plans to sell 120,000 units of a certain product line at a price of $6
per unit. There are 10,000 units of the product in inventory at January 1 and the inventory is to
be increased 20% during the year.
Two types of materials are used to make the product. Four units of Material A, costing 30 cents
each, are required for each unit of product, and two units of Material B, costing 40 cents each,
are required for each unit of product. On January 1, there are 10,000 units of Material A in
inventory and 5,000 units of Material B. Plans for the year indicate that 12,000 units of Material
A and 6,000 units of Material B are to be in the inventory on December 31.
Each unit of product can be produced in 15 minutes of direct labor time. Direct labor is paid at
the rate of $8.00 an hour. The variable manufacturing overhead rate is $0.50 per direct labor hour
and the fixed manufacturing overhead for the year is estimated at $140,000.
Required:
a. Prepare a production budget for the year.
b. Prepare a direct materials budget for the year.
c. Prepare a direct labor budget for the year.
d. Prepare a budget for manufacturing overhead for the year.
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121) A sales budget is given below for one of the products manufactured by Dance, Ltd.
Month Sales Budget in Units
July 18,000
August 20,000
September 24,000
October 26,000
November 19,000
December 16,000
The inventory of finished goods at the end of each month must be equal to 5,000 units plus 10%
of the next month’s sales. On June 30, the finished goods inventory totaled 6,800 units.
Each unit of product requires three ounces of a special liquid extract known as SV-6. Sometimes
the extract is in short supply; for this reason, the company has a policy of maintaining an
inventory at the end of each month equal to one half of the next month’s production needs. This
requirement was met on July 1 of the current year.
Required:
Prepare a budget showing the quantity of SV-6 to be purchased for September.
122) The production manager of Dame Enterprises plans to have an inventory on hand at the end
of each month that will equal 150% of the next month’s sales. This requirement was met at the
end of February. A sales budget for the four months ending June 30th is as follows:
Month Units
March 30,000
April 50,000
May 80,000
June 40,000
Required:
Prepare a production budget for April and May.
123) Atlanta Import Enterprises, a wholesaler of imported goods, expects the following unit sales
over the next five months:
Month Units
April 200,000
May 240,000
June 270,000
July 300,000
August 280,000
Atlanta Import’s goal is to maintain an inventory equal to 10% of next month’s sales
requirements. March 31st inventory is projected to be 18,000 units.
Required:
Prepare a purchases budget (in units) for Atlanta Import for as many months as is possible based
on data provided. Assume a 30-day month
124) Shipping Company plans to sell 90,000 units of a certain product line at a price of $16 per
unit. There are 7,500 units of the product in inventory at January 1 and the inventory is to be
increased 15% during the year.
Two types of materials are used to make the product. Three units of Material A, costing 40 cents
each, are required for each unit of product, and two units of Material B, costing 36 cents each,
are required for each unit of product. On January 1, there are 10,000 units of Material A in
inventory and 5,000 units of Material B. Plans for the year indicate both Material A and B
inventories will increase 10%.
Each unit of product can be produced in 20 minutes of direct labor time. Direct labor is paid at
the rate of $12.00 an hour. The variable manufacturing overhead rate is $2.60 per direct labor
hour and the fixed manufacturing overhead for the year is estimated at $175,000.
Required:
a. Prepare a production budget for the year.
b. Prepare a direct materials budget for the year.
c. Prepare a direct labor budget for the year.
d. Prepare a budget for manufacturing overhead for the year.
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125) Folkes, Inc has prepared a sales budget for the second quarter as shown below:
Budgeted Sales
April $ 400,000
May 500,000
June 600,000
The company is in the process of preparing a cash budget for the second quarter. To this end, the
following information has been assembled:
Collections on Sales
In month of sale 70 %
In month following sale 25 %
In second month following sale 5 %
The company gives a 1% cash discount to customers paying in the month of the sale. Records
show past sales to be: January $300,000, February $340,000, and March $360,000.
Required:
Prepare a schedule of cash receipts for the third quarter.
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126) Parlour Company, a retailer, has the following sales budget for the coming year.
Month Sales
January $ 180,000
February $ 190,000
March $ 210,000
April $ 230,000
The sales price per unit is $10; the cost of sales is 70% of sales. Parlour keeps inventory equal to
double the coming month’s budgeted sales requirements. It pays for purchases 65% in the month
of purchase and 35% in the month after purchase. Inventory at the beginning of January is
$204,400. Accounts Payable on January 1 is $43,000.
Required:
a. Prepare a schedule of purchases, in units and in dollars, for the first three months of the year.
b. Prepare a schedule of cash disbursements on account for the first three months of the year.
127) Xenos Company has the following sales projections for the coming months:
Month Sales
January $ 60,000
February 68,000
March 75,000
April 80,000
May 95,000
June 90,000
Xenos collects 20% of its sales in the month of sale, 45% in the month following the sale, and
35% in the second month following the sale.
Required:
a. Prepare a schedule of cash receipts for the three months April through June.
b. What would be the accounts receivable balance on June 30?
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128) Italian Company, a retailer of Italian handbags, has the following sales budget for the
coming year.
Month Sales
January $ 300,000
February $ 315,000
March $ 345,000
April $ 367,500
The sales price per unit is $15; the cost of sales is 60% of sales. Italian keeps inventory equal to
the coming month’s budgeted sales requirements. It pays for purchases 55% in the month of
purchase and 45% in the month after purchase. Inventory at the beginning of January is
$172,800. Accounts Payable on January 1 is $83,000.
Required:
a. Prepare a schedule of purchases, in units and in dollars, for the first three months of the year.
b. Prepare a schedule of cash disbursements on account for the first three months of the year.
c. Determine the accounts payable balance as of March 31.
100
129) Roman Company, a merchandising firm, has the following sales budget for the coming
year.
Month Sales
July $ 270,000
August $ 288,000
September $ 312,000
October $ 330,000
The sales price per unit is $20; the cost of sales is 60% of sales. Roman keeps inventory equal to
50% of the coming month’s budgeted sales requirements. It pays for purchases 35% in the month
of purchase and 65% in the month after purchase. Inventory at the beginning of July is $78,000.
Accounts Payable on July 1 is $100,750.
Required:
a. Prepare a schedule of purchases, in units and in dollars, for the first three months of the year.
b. Prepare a schedule of cash disbursements on account for the first three months of the year.