13–41
recomputes its predetermined overhead rate every month. The predetermined overhead
rate for September should be:
53.
The manufacturing overhead budget at Rost Corporation is based on budgeted direct
labor-hours. The direct labor budget indicates that 2,800 direct labor–hours will be
required in September. The variable overhead rate is $7.00 per direct labor-hour. The
company’s budgeted fixed manufacturing overhead is $43,120 per month, which includes
depreciation of $3,640. All other fixed manufacturing overhead costs represent current
cash flows. The September cash disbursements for manufacturing overhead on the
manufacturing overhead budget should be:
54.
The marketing and administrative expense budget of Frazier Corporation is based on
budgeted unit sales, which are 5,500 units for June. The variable marketing and
administrative expense is $1.00 per unit. The budgeted fixed marketing and administrative
expense is $101,200 per month, which includes depreciation of $6,050 per month. The
remainder of the fixed marketing and administrative expense represents current cash
flows. The cash disbursements for marketing and administrative expenses on the June
marketing and administrative expense budget should be:
55.
Bentonville Inc. bases its marketing and administrative expense budget on budgeted unit
sales. The sales budget shows 3,200 units are planned to be sold in December. The
variable marketing and administrative expense is $3.10 per unit. The budgeted fixed
marketing and administrative expense is $60,800 per month, which includes depreciation
of $6,720 per month. The remainder of the fixed marketing and administrative expense
represents current cash flows. The cash disbursements for marketing and administrative
expenses on the December marketing and administrative expense budget should be:
56.
The Colson Company has budgeted sales for the year as follows:
Quarter
1
2
3
4
Sales in units
12,000
14,000
18,000
16,000
57.
The Colson Company has budgeted sales for the year as follows:
Quarter
1
2
3
4
Sales in units
12,000
14,000
18,000
16,000
58.
The Tori Company had budgeted production for the year as follows:
Quarter
1
2
3
4
Production in units
10,000
12,000
16,000
14,000
Four pounds of raw materials are required for each unit produced. Raw materials on hand
at the start of the year total 4,000 lbs. The raw materials inventory at the end of each
quarter should equal 10% of the next quarter’s production needs in materials. Budgeted
purchases of raw materials in the third quarter would be (in lbs.):
59.
The Molson Company had budgeted production for the year as follows:
Quarter
1
2
3
4
Production in units
10,000
12,000
16,000
14,000
Four pounds of raw materials are required for each unit produced. Raw materials on hand
at the start of the year total 4,000 lbs. The raw materials inventory at the end of each
quarter should equal 10% of the next quarter’s production needs in materials. Budgeted
purchases of raw materials in the second quarter would be (in lbs.):
60.
Krier Industries has just completed its sales forecasts and its marketing department
estimates that the company will sell 36,000 units during the upcoming year. In the past,
management has maintained inventories of finished goods at approximately three months’
sales. However, the estimated inventory at the start of the year of the budget period is
only 6,000 units. Sales occur evenly throughout the year. What is the estimated production
level (units) for the first month of the upcoming budget year?
61.
62.
63.
The following budgeted information is provided:
Month
1
2
3
Sales in units
15,000
20,000
18,000
Production in units
16,000
22,000
15,000
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. At the
beginning of Month 1, there was 3,200 lbs. of materials on hand. Purchases of raw
materials for Month 1 would be (in pounds):
64.
Which of the following represents the correct order in which the indicated budget
documents for a manufacturing company would be prepared?
13–54
65.
The starting point in preparing a comprehensive budget for a manufacturing company
limited by its ability to produce and not by its ability to sell is
66.
Merriweather Corporation is a manufacturer of tables sold to schools, restaurants, hotels,
and other institutions. The table tops are manufactured by Merriweather, but the table
legs are purchased from an outside supplier. The Assembly Department takes a
manufactured table top and attaches the four purchased table legs. It takes 20 minutes of
labor to assemble a table. The company follows a policy of producing enough tables to
insure that 40% of next month’s sales are in the finished goods inventory. Merriweather
also purchases sufficient raw materials (legs) to insure that raw materials (legs) inventory
is 60% of the following month’s scheduled production needs. Merriweather’s sales budget
in units for the next quarter is as follows: (CMA adapted)
July
2,300
August
2,500
September
2,100
Merriweather’s ending inventories in units for June 30 are:
Finished goods
1,900
Raw materials (legs)
4,000
The number of tables to be produced during August is:
67.
Merriweather Corporation is a manufacturer of tables sold to schools, restaurants, hotels,
and other institutions. The table tops are manufactured by Merriweather, but the table
legs are purchased from an outside supplier. The Assembly Department takes a
manufactured table top and attaches the four purchased table legs. It takes 20 minutes of
labor to assemble a table. The company follows a policy of producing enough tables to
insure that 40% of next month’s sales are in the finished goods inventory. Merriweather
also purchases sufficient raw materials (legs) to insure that raw materials (legs) inventory
is 60% of the following month’s scheduled production needs. Merriweather’s sales budget
in units for the next quarter is as follows: (CMA adapted)
July
2,300
August
2,500
September
2,100
Merriweather’s ending inventories in units for June 30 are:
Finished goods
1,900
Raw materials (legs)
4,000
68.
Budgeted production needs are determined by:
69.
Which of the following is not correct regarding the manufacturing overhead budget?
70.
The number of units required for production is equal to:
71.
The amount of materials to be purchased during the budget period is equal to budgeted: