Chapter 13
Aluminum
Tin
Estimated beginning inventory
12,000 units
6,000 units
Desired ending inventory
15,000 units
4,000 units
Region I, anticipated sales
380,000 units
85,000 units
Region II, anticipated sales
125,000 units
25,000 units
The unit selling price for aluminum cans is $0.15 and for tin cans is $0.20.
Budgeted sales for the month are:
a.
$97,550.
b.
$123,000.
c.
$82,750.
d.
$81,550.
a
Moderate
Multiple Choice
False
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82. Below is budgeted production and sales information for Octofic Cans, Inc. for the month of March:
Aluminum
Tin
Estimated beginning inventory
12,000 units
6,000 units
Desired ending inventory
15,000 units
4,000 units
Region I, anticipated sales
380,000 units
85,000 units
Region II, anticipated sales
125,000 units
25,000 units
The unit selling price for aluminum cans is $0.15 and for tin cans is $0.20.
Budgeted production for aluminum cans during the month is:
a.
383,000 units.
b.
508,000 units.
c.
502,000 units.
d.
532,000 units.
Moderate
Chapter 13
83. Below is budgeted production and sales information for Octofic Cans, Inc. for the month of March:
Aluminum
Tin
Estimated beginning inventory
12,000 units
6,000 units
Desired ending inventory
15,000 units
4,000 units
Region I, anticipated sales
380,000 units
85,000 units
Region II, anticipated sales
125,000 units
25,000 units
The unit selling price for aluminum cans is $0.15 and for tin cans is $0.20.
Budgeted production for tin cans during the month is:
a.
108,000 units.
b.
83,000 units.
c.
112,000 units.
d.
120,000 units.
Multiple Choice
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Multiple Choice
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Chapter 13
84. Cape Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated
beginning inventory is 98,000 units, and desired ending inventory is 80,000 units. The quantities of direct materials
expected to be used for each unit of finished product are given below.
Material A
.50 lb. per unit
@ $0.60 per pound
Material B
1.00 lb. per unit
@ $1.70 per pound
Material C
1.20 lb. per unit
@ $1.00 per pound
The amount of direct material A purchased during the year is:
a.
$216,000.
b.
$186,600.
c.
$192,000.
d.
$245,400.
Moderate
Multiple Choice
False
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85. Cape Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated
beginning inventory is 98,000 units, and desired ending inventory is 80,000 units. The quantities of direct materials
expected to be used for each unit of finished product are given below.
Material A
.50 lb. per unit
@ $0.60 per pound
Material B
1.00 lb. per unit
@ $1.70 per pound
Material C
1.20 lb. per unit
@ $1.00 per pound
The amount of direct material B purchased during the year is:
a.
$1,224,000.
b.
$1,390,600.
c.
$1,088,000.
d.
$1,057,400.
GO4W-NQNBEE
Chapter 13
Moderate
Multiple Choice
False
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86. Cape Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated
beginning inventory is 98,000 units, and desired ending inventory is 80,000 units. The quantities of direct materials
expected to be used for each unit of finished product are given below.
Material A
.50 lb. per unit
@ $0.60 per pound
Material B
1.00 lb. per unit
@ $1.70 per pound
Material C
1.20 lb. per unit
@ $1.00 per pound
The amount of direct material C purchased during the year is:
a.
$789,600.
b.
$768,000.
c.
$746,400.
d.
$650,400.
c
Moderate
Multiple Choice
False
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Chapter 13
87. If the expected sales volume for the current period is 25,000 units, the desired ending inventory is 700 units, and the
beginning inventory is 450 units, the number of units set forth in the production budget, representing total production for
the current period, is:
a.
25,250 units.
b.
21,500 units.
c.
22,300 units.
d.
22,800 units.
Multiple Choice
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88. Production estimates for August are as follows:
Estimated inventory (units), August 1
3,000
Desired inventory (units), August 31
2,000
Expected sales volume (units), August
40,000
For each unit produced, the direct materials requirements are as follows:
Direct material A ($2 per lb.)
5 lbs.
Direct material B ($11 per lb.)
1 lb.
The number of pounds of materials A and B required for August production is:
a.
195,000 lbs. of A; 39,000 lbs. of B.
b.
200,000 lbs. of A; 40,000 lbs. of B.
c.
205,000 lbs. of A; 41,000 lbs. of B.
d.
210,000 lbs. of A; 42,000 lbs. of B.
Chapter 13
89. Production estimates for August are as follows:
Estimated inventory (units), August 1
12,000
Desired inventory (units), August 31
9,000
Expected sales volume (units), August
75,000
For each unit produced, the direct materials requirements are as follows:
Direct material A ($5 per lb.)
3 lbs.
Direct material B ($15 per lb.)
1/2 lb.
The total direct materials purchases of materials A and B required for August production is:
a.
$1,260,000 for A; $630,000 for B.
b.
$1,080,000 for A; $540,000 for B.
c.
$1,125,000 for A; $562,500 for B.
d.
$1,170,000 for A; $585,000 for B.
Multiple Choice
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Multiple Choice
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Chapter 13
90. Production estimates for July are as follows:
Estimated inventory (units), July 1
725
Desired inventory (units), July 31
1,200
Expected sales volume (units), July
7,500
For each unit produced 4 hours of direct labor is required. The labor rate per hour is $15. The number of direct labor hours
required for July production is:
a.
25,200.
b.
27,100.
c.
31,900.
d.
34,800.
c
Moderate
Multiple Choice
False
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91. Based on the following production and sales estimates for May, determine the number of units expected to be
manufactured in May.
Estimated inventory (units), May 1
20,000
Desired inventory (units), May 31
15,000
Expected sales volume (units):
South region
30,000
West region
40,000
North region
20,000
Unit sales price
$10
a.
85,000 units
b.
90,000 units
c.
95,000 units
d.
105,000 units
Chapter 13
Multiple Choice
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92. A budget that provides the starting point for the preparation of a direct labor cost budget is the:
a.
selling and administrative expenses budget.
b.
capital expenditures budget.
c.
production budget.
d.
factory overhead budget.
Multiple Choice
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93. In a production budget, if the number of units expected to be sold during the year is 8,000, the number of units desired
in ending inventory is 470 units, and the number of units in beginning inventory is 510 units, the total production for the
year is:
Chapter 13
a.
7,160.
b.
6,660.
c.
7,810.
d.
7,960.
Moderate
Multiple Choice
False
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94. Which of the following budgets summarizes plans for acquiring fixed assets?
a.
A selling and administrative expenses budget
b.
A factory overhead budget
c.
A cash budget
d.
A capital expenditures budget
Easy
Multiple Choice
False
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GC3U-8RSS-N3JW-GOSS-EQJI-CCSS-ECJS-CC5U-Y3TA-E7JI-YT4D-JFNN-4OTI-
Chapter 13
95. The _____ estimates the expected receipts and payments of cash for a period of time.
a.
capital expenditures budget
b.
cash sales budget
c.
cash budget
d.
production budget
Multiple Choice
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96. Two major budgets comprising the budgeted balance sheet are:
a.
the cash budget and the capital expenditures budget.
b.
the sales budget and the production budget.
c.
the cost of goods sold budget and the selling and administrative expenses budget.
d.
the static budget and the flexible budget.
Multiple Choice
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Chapter 13
97. Benjamin Corporation began its operations on September 1 of the current year. Budgeted sales for the first three
months of business are $250,000, $300,000, and $420,000, respectively, for September, October, and November. The
company expects to sell 20% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the
month of the sale, 25% in the month following the sale, and the remainder in the following month.
The cash collections from accounts receivable in September are:
a.
$175,000.
b.
$140,000.
c.
$190,000.
d.
$168,000.
Moderate
False
JFND-GO3A-EW4D-RT1B
98. Benjamin Corporation began its operations on September 1 of the current year. Budgeted sales for the first three
months of business are $250,000, $300,000, and $420,000, respectively, for September, October, and November. The
company expects to sell 20% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the
month of the sale, 25% in the month following the sale, and the remainder in the following month.
The cash collections from accounts receivable in October are:
a.
$270,000.
b.
$272,500.
c.
$210,000.
d.
$218,000.
Moderate
False
Chapter 13
99. Benjamin Corporation began its operations on September 1 of the current year. Budgeted sales for the first three
months of business are $250,000, $300,000, and $420,000, respectively, for September, October, and November. The
company expects to sell 20% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the
month of the sale, 25% in the month following the sale, and the remainder in the following month.
The cash collections from accounts receivable in November are:
a.
$305,200.
b.
$294,000.
c.
$235,200.
d.
$381,500.
a
Moderate
Multiple Choice
False
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100. Kohlman Company began its operations on March 31 of the current year. Projected manufacturing costs for the first
three months of business are $156,800, $195,200, and $217,600, respectively, for April, May, and June. Depreciation,
insurance, and property taxes represent $28,800 of the estimated monthly manufacturing costs. Insurance was paid on
March 31, and property taxes will be paid in November. Three-fourths of the remainder of the manufacturing costs are
expected to be paid in the month in which they are incurred with the balance to be paid in the following month.
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Chapter 13
The cash payments for manufacturing in the month of April are:
a.
$128,000.
b.
$117,600.
c.
$156,800.
d.
$96,000.
Challenging
False
JFND-GO3A-EW4D-RT1G
GO4W-NQNBEE
101. Kohlman Company began its operations on March 31 of the current year. Projected manufacturing costs for the first
three months of business are $156,800, $195,200, and $217,600, respectively, for April, May, and June. Depreciation,
insurance, and property taxes represent $28,800 of the estimated monthly manufacturing costs. Insurance was paid on
March 31, and property taxes will be paid in November. Three-fourths of the remainder of the manufacturing costs are
expected to be paid in the month in which they are incurred with the balance to be paid in the following month.
The cash payments for manufacturing in the month of May are:
a.
$185,600.
b.
$156,800.
c.
$124,800.
d.
$146,400.
Challenging
False
Chapter 13
102. Kohlman Company began its operations on March 31 of the current year. Projected manufacturing costs for the first
three months of business are $156,800, $195,200, and $217,600, respectively, for April, May, and June. Depreciation,
insurance, and property taxes represent $28,800 of the estimated monthly manufacturing costs. Insurance was paid on
March 31, and property taxes will be paid in November. Three-fourths of the remainder of the manufacturing costs are
expected to be paid in the month in which they are incurred with the balance to be paid in the following month.
The cash payments for manufacturing in the month of June are:
a.
$294,000.
b.
$235,200.
c.
$183,200.
d.
$381,500.
c
Challenging
Multiple Choice
False
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103. Nyt Garments Co.’s static budget at 10,000 units of production includes $30,000 for direct material and $5,000 for
electric power. Total fixed costs are $31,000. At 12,000 units of production, a flexible budget would show:
a.
variable costs of $40,000 and $35,000 of fixed costs.
b.
variable costs of $44,000 and $23,000 of fixed costs.
c.
variable costs of $42,000 and $31,000 of fixed costs.
d.
variable costs of $41,000 and $30,000 of fixed costs.
c
Challenging
Multiple Choice
11/29/2016 2:56 AM
JFND-GO3A-EW4D-RT1F
Chapter 13
104. Which of the following is true of a capital expenditures budget?
a.
It summarizes plans for acquiring fixed assets.
b.
It indicates all the estimated cash receipts and cash payments for a period of time.
c.
It records all short-term expenses for a period.
d.
It lists all the transactions related to capital stock.
Multiple Choice
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105. Production and sales estimates for May for the Hudson Co. are as follows:
Estimated inventory (units), May 1
17,500
Desired inventory (unit), May 31
19,300
Expected sales volume (units):
Area W
4,200
Area X
7,000
Area Y
9,000
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Chapter 13
Unit sales price
$15
The number of units expected to be sold in May is:
a.
22,000.
b.
18,400.
c.
23,800.
d.
20,200.
Moderate
Multiple Choice
False
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106. Production and sales estimates for June are as follows:
Estimated inventory (units), June 1
18,500
Desired inventory (units), June 30
19,000
Expected sales volume (units):
Area X
3,000
Area Y
4,000
Area Z
5,500
Unit sales price
$20
The number of units expected to be manufactured in June is:
a.
10,000.
b.
12,000.
c.
13,000.
d.
12,500.
c
Moderate
Multiple Choice
False
SACC.WARR.18.13-2 – LO: 13.02
Chapter 13
107. Production and sales estimates for June are as follows:
Estimated inventory (units), June 1
8,000
Desired inventory (units), June 30
9,000
Expected sales volume (units):
Area X
3,000
Area Y
4,000
Area Z
5,500
Unit sales price
$25
The budgeted total sales for June is:
a.
$300,000.
b.
$337,500.
c.
$312,500.
d.
$287,500.
c
Moderate
Multiple Choice
False
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108. As of January 1 of the current year, the Butner Company had accounts receivables of $50,000. Sales for January,
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Chapter 13
February, and March were as follows: $120,000, $140,000, and $150,000. 20% of each month’s sales are for cash. Of the
remaining 80% (the credit sales), 60% are collected in the month of sale, with the remaining 40% collected in the
following month. What is the total cash collected (both from accounts receivable and for cash sales) in the month of
February?
a.
$132,000
b.
$105,600
c.
$133,600
d.
$95,200
c
Challenging
Multiple Choice
False
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109. Standards that can be achieved only under perfect operating conditions, such as no idle time, no machine
breakdowns, and no materials spoilage, are called:
a.
theoretical standards.
b.
appropriate standards.
c.
normal standards.
d.
break-even standards.
a
Easy
Multiple Choice
False
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Chapter 13
11/30/2016 12:03 AM
110. Which of the following is true of standards?
a.
Standards are an integrated set of operating, investing, and financing budgets for a period of time.
b.
Standards help employees to focus on the larger objectives of an organization by giving less importance to
their own operations.
c.
Standards are easy to maintain in a dynamic manufacturing environment.
d.
Standards limit operating improvements by discouraging improvement beyond the standard.
Multiple Choice
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111. A _____ summarizes actual costs, standard costs, and the differences for the units produced.
a.
zero-base report
b.
budget performance report
c.
budgeted balance sheet
d.
budgeted income statement
Multiple Choice
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Chapter 13
112. Standard cost per unit is calculated as:
a.
standard rate per hour multiplied by standard time.
b.
standard price multiplied by standard quantity.
c.
standard quantity divided by standard price.
d.
service units used divided by available service units.
Multiple Choice
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113. Following is the information about Standard Inc.
The standard costs and actual costs for direct materials, direct labor, and factory overhead for the manufacture of 2,500
units of product are as follows:
Standard Costs
Direct materials
2,500 kilograms @ $8
Direct labor
7,500 hours @ $12
Actual Costs
Direct materials
2,600 kilograms @ $8.75
Direct labor
7,400 hours @ $11.40
Factory overhead (100% capacity – 10,000 hrs.):
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