40. Fixed costs classified according to the time frame perspective are known as:
41. The concept of a standard used for planning and control purposes is most like a:
42. Standards are most appropriately used to:
43. Standards are likely to be most useful when expressed in:
44. Developing a standard cost for a product or service will usually involve:
45. Once standard costs for products or services have been developed:
46. The kind of standard that is most useful for planning and control is:
47. Standard costing is developed and used for:
48. Breaded Oak, Inc. has a policy that requires 20 percent of the expected sales of its
product to be on hand at the end of the prior month. Forecasted sales, in units, for the months of
January through April are as follows:
(a.) Calculate the number of units planned for ending inventory for January, February, and March.
(b.) Calculate the number of units budgeted to be produced in January, February, and March.
49. Brenda, Inc. makes wooden tables. Each table requires 28 pounds of lumber to produce.
The sales forecast for March is 1,600 tables. Estimated beginning and desired ending inventories
for March are the following:
(a.) Calculate the number of tables to be produced in March.
(b.) Calculate the number of pounds of lumber to be purchased in March.
50. Aborkian Co. is forecasting sales of 75,000 units of product for November. To make one
unit of finished product, seven pounds of raw materials are required. Actual beginning and
desired ending inventories of raw materials and finished goods are:
(a.) Calculate the number of units of product to be produced during November.
(b.) Calculate the number of pounds of raw materials to be purchased during November.
51. Pacesetters, Inc., has actual sales for July and August and forecasted sales for
September, October, November, and December as follows:
(a.) The firm’s policy is to have finished goods inventory on hand at the end of the month that is
equal to 70 percent of the next month’s sales. It is currently estimated that there will be 4,200
units on hand at the end of August. Calculate the number of units to be produced in each of the
months of September, October, and November.
(b.) Each unit of finished product requires 6.5 pounds of raw materials. The firm’s policy is to
have raw material inventory on hand at the end of each month that is equal to 60 percent of the
next month’s estimated usage. It is currently estimated that 26,000 pounds of raw materials will
be on hand at the end of August. Calculate the number of pounds of raw materials to be
purchased in each of the months of September and October.
52. Avery’s Bicycle Shop, a retail store, has an average gross profit ratio of 28 percent. The
sales forecast for the next four months follows:
Management’s inventory policy is to have ending inventory equal to 1.4 times the cost of sales for
the subsequent month, although it is estimated that the cost of inventory at March 31 will be
$170,000.
53. Danzi, Inc., has budgeted sales for the month of July and estimated cost behavior
patterns for a number of its expenses listed below. From this information prepare an operating
expense budget for the month of July.
54. Remote Center’s sales are all made on account. The firm’s collection experience has been
that 20 percent of a month’s sales are collected in the month of sale, 60 percent are collected in
the month following the sale, and 18 percent are collected in the second month following the
sale. The sales forecast for the months of August through November is:
55. Dominic’s, Inc. had actual sales for January and February and forecasted sales for March,
April, May, and June as follows:
56. The following information for the month of May has been provided for Bowser Company:
57. Peachtree’s Siding and Window Co. is a custom home improvement company. All sales
are made on account: 30 percent of a month’s sales are collected in the month of sale, 60 percent
are collected in the month following the sale, and 8 percent are collected in the second month
following the sale. Cash on hand on October 1 is estimated to be $32,000.
Merchandise purchases and operating expenses are paid as follows:
58. The monthly cash budgets for the first quarter of 2013 are shown below ($000 omitted)
for XYZ Company. A minimum cash balance of $40,000 is required. A line of credit has been
established with ABC’s bank at a 7.5% interest rate. Calculate the missing amounts:
59. XYZ Company produces high quality widgets. Three raw materials are converted into the
finished product by two labor groups. Manufacturing overhead is applied to finished units based
on direct labor hours. The following standards have been established for each widget produced:
