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143) Memphis Company anticipates total sales for April, May, and June of $800,000, $900,000, and
$950,000 respectively. Cash sales are normally 25% of total sales. Of the credit sales, 30% are
collected in the same month as the sale, 65% are collected during the first month after the sale, and
the remaining 5% are collected in the second month. Compute the amount of accounts receivable
reported on the company's budgeted balance sheet for June 30.
A) $532,500. B) $712,500. C) $617,500. D) $463,125. E) $561,500.
144) Ratchet Manufacturing's August sales budget calls for sales of 8,000 units. Each month's sales are
expected to exceed the prior month's results by 5%. The product selling price is $25 per unit. The
expected total sales dollars for September's sales budget are:
A) $190,000. B) $220,000. C) $200,000. D) $210,000. E) $8,400.
145) Ratchet Manufacturing anticipates total sales for August, September, and October of $200,000,
$210,000, and $220,500 respectively. Cash sales are normally 25% of total sales and the remaining
sales are on credit. All credit sales are collected in the first month after the sale. Compute the
amount of cash received for September.
A) $102,500. B) $307,500. C) $150,000. D) $157,500. E) $202,500.
146) Ratchet Manufacturing anticipates total sales for August, September, and October of $200,000,
$210,000, and $220,500 respectively. Cash sales are normally 25% of total sales and the remaining
sales are on credit. All credit sales are collected in the first month after the sale. Compute the
amount of accounts receivable to be reported on the company's budgeted balance sheet for August.
A) $52,500. B) $50,000. C) $200,000. D) $157,500. E) $150,000.
147) Use the following information to determine the ending cash balance to be reported on the month
ended June 30 cash budget.
Beginning cash balance on June 1, $73,000.
Cash receipts from sales, $413,000.
Budgeted cash disbursements for purchases, $268,000.
Budgeted cash disbursements for salaries, $35,000.
Other budgeted cash expenses, $57,000.
Cash repayment of bank loan, $32,000.
Budgeted depreciation expense, $34,000.
A) $126,000. B) $21,000. C) $60,000. D) $149,000. E) $94,000.
148) Trago Company manufactures a single product and has a JIT policy that ending inventory must
equal 5% of the next month's sales. It estimates that May's ending inventory will consist of 14,000
units. June and July sales are estimated to be 280,000 and 290,000 units, respectively. Compute the
number of units to be produced that would appear on the company's production budget for the
month of June.
A) 266,000. B) 280,000. C) 294,500. D) 280,500. E) 290,000.
149) Trago Company manufactures a single product and has a JIT policy that ending inventory must
equal 5% of the next month's sales. It estimates that May's ending inventory will consist of 14,000
units. June and July sales are estimated to be 280,000 and 290,000 units, respectively. Trago
assigns variable overhead at a rate of $1.80 per unit of production. Fixed overhead equals $400,000
per month. Compute the number of units to be produced and use this amount to compute the total
budgeted overhead that would appear on the factory overhead budget for the month of June.
A) $878,800. B) $920,200. C) $922,000. D) $904,900. E) $930,100.
150) Glaston Company manufactures a single product using a JIT inventory system. The production
budget indicates that the number of units expected to be produced are 193,000 in October, 201,500
in November, and 198,000 in December. Glaston assigns variable overhead at a rate of $0.75 per
unit of production. Fixed overhead equals $150,000 per month. Compute the total budgeted
overhead that would appear on the factory overhead budget for month of October.
A) $301,125. B) $343,000. C) $294,750. D) $150,000. E) $144,750.
151) Zhang Industries sells a product for $700. Unit sales for May were 400 and each month's sales are
expected to exceed the prior month's results by 3%. Compute the total sales dollars to be reported
on the sales budget for month ended June 30.
A) $297,000. B) $288,400. C) $280,000. D) $364,000. E) $271,600.
152) Zhang Industries sells a product for $700. Unit sales for May were 400 and each month's sales are
expected to exceed the prior month's results by 3%. Zhang pays a sales manager a monthly salary
of $3,000 and a commission of 2% of sales. Compute the projected selling expense to be reported
on the selling expense budget for the manager for month ended June 30.
A) $8,652. B) $5,768. C) $11,652. D) $8,600. E) $8,768.
153) Zhang Industries sells a product for $700. Unit sales for May were 400 and each month's sales are
expected to exceed the prior month's results by 3%. Zhang pays a sales manager a monthly salary
of $3,000 and a commission of 2% of sales in dollars. Assume 30% of Zhang's sales are for cash.
The remaining 70% are credit sales; these customers pay in the month following the sale. Compute
the budgeted cash receipts for June.
A) $196,000. B) $280,000. C) $201,880. D) $285,880. E) $282,520.
154) Zhang Industries budgets production of 300 units in June and 310 units in July. Each finished unit
requires 4 pounds (lbs.) of raw material K, which costs $5 per pound. Each month's ending
inventory of raw materials should be 30% of the following month's budgeted production. The June
1 raw materials inventory has 360 pounds of raw material K. Compute budgeted purchases for raw
material K in pounds for June.
A) 880 lbs. B) 1,212 lbs. C) 1,200 lbs. D) 1,220 lbs. E) 1,240 lbs.
155) Zhang Industries budgets production of 300 units in June and 310 units in July. Each finished unit
requires 4 pounds of raw material K, which costs $5 per pound. Each month's ending inventory of
raw materials should be 30% of the following month's budgeted production. The June 1 raw
materials inventory has 360 pounds of raw material K. Compute budgeted cost of purchases for
raw material K for June.
A) $4,400. B) $6,200. C) $6,000. D) $6,100. E) $6,060.
156) Zhang Industries budgets production of 300 units in June and 310 units in July. Each unit requires
1.5 hours of direct labor. The direct labor rate is $14 per hour. The indirect labor rate is $21.00 per
hour. Compute the budgeted direct labor cost for July.
A) $6,510. B) $16,275. C) $9,450. D) $9,765. E) $6,300.
157) Zhang Industries is preparing a cash budget for June. The company has $25,000 cash at the
beginning of June and anticipates $95,000 in cash receipts and $111,290 in cash disbursements
during June. The company has no loans outstanding on June 1. Compute the amount the company
must borrow, if any, to maintain a $20,000 cash balance.
A) $16,290. B) $12,290. C) $28,710. D) $6,290. E) $11,290.
158) Webster Corporation's budgeted sales for February are $325,000. Webster pays sales
representatives a commission of 6% of sales dollars. The company pays a sales manager a monthly
salary of $4,400 and expects advertising expense of $2,000 per month. Compute the total selling
expenses to be reported on the selling expense budget for the month of February.
A) $19,500. B) $6,400. C) $21,500. D) $25,900. E) $23,900.
159) Webster Corporation is preparing a master budget for the first quarter of the year. The company
budgets production of 2,680 units in January, 2,600 units in February and 2,740 units in March.
Each unit requires 0.6 hours of direct labor. The direct labor rate is $12 per hour. Compute the
budgeted direct labor cost for the first quarter budget.
A) $57,744. B) $56,160. C) $48,120. D) $96,240. E) $93,600.
160) Webster Corporation's monthly projected general and administrative expenses include $5,000
administrative salaries, $2,400 of other cash administrative expenses, $1,350 of depreciation
expense on the administrative equipment, and 0.5% monthly interest on an outstanding bank loan
of $10,000. Compute the total general and administrative expenses to be reported on the general
and administrative expense budget per month.
A) $8,750. B) $8,800. C) $17,400. D) $5,050. E) $7,400.
161) Webster Corporation is preparing its cash budget for April. The March 31 cash balance is $36,400.
Cash receipts are expected to be $641,000 and cash payments for purchases are expected to be
$608,500. Other cash expenses expected are $27,000 selling and $33,500 general and
administrative. The company desires a minimum cash balance at the end of each month of $30,000.
If necessary, the company borrows enough cash to meet the minimum using a short-term note.
Webster's preliminary cash balance before loan activity for April is expected to be:
A) $21,600. B) $30,000. C) ($28,000). D) $8,400. E) $68,900.
162) Webster Corporation is preparing its cash budget for April. The March 31 cash balance is $36,400.
Cash receipts are expected to be $641,000 and cash payments for purchases are expected to be
$608,500. Other cash expenses expected are $27,000 selling and $33,500 general and
administrative. The company desires a minimum cash balance at the end of each month of $30,000.
If necessary, the company borrows enough cash to meet the minimum using a short-term note. The
amount Webster must borrow during April is:
A) $98,900. B) $0. C) $8,400. D) $21,600. E) $58,000.
163) Flagstaff Company has budgeted production units for July of 7,900 units. Variable factory overhead
is $1.20 per unit. Budgeted fixed factory overhead is $19,000, which includes $3,000 of factory
equipment depreciation. Compute the total budgeted overhead to be reported on the factory
overhead budget for the month.
A) $9,480. B) $28,480. C) $25,480. D) $19,000. E) $23,900.
164) Flagstaff Company has budgeted production units of 7,900 for July and 8,100 for August. The
direct materials requirement per unit is 2 ounces (oz.). The company has determined that it wants
to have safety stock of direct materials on hand at the end of each month to complete 20% of the
units budgeted in the following month. There was 3,160 ounces of direct material in inventory at
the start of July. The total amount of direct materials in ounces, to be purchased in July is:
A) 16,200 oz. B) 15,800 oz. C) 15,880 oz. D) 19,040 oz. E) 15,720 oz.
165) Flagstaff Company has budgeted production units of 7,900 for July and 8,100 for August. The
direct materials requirement per unit is 2 ounces (oz.). The company has determined that it wants
to have safety stock of direct materials on hand at the end of each month to complete 20% of the
units budgeted in the following month. There was 3,160 ounces of direct material in inventory at
the start of July. The total cost of direct materials purchases for the July direct materials budget,
assuming the materials cost $1.15 per ounce, is:
A) $21,896. B) $18,262. C) $18,170. D) $14,536. E) $18,078.
166) Flagstaff Company has budgeted production units of 7,900 for July and 8,100 for August. The
direct labor requirement per unit is 0.50 hours. Labor is paid at the rate of $21 per hour. The total
cost of direct labor for the month of August is:
A) $168,000. B) $85,050. C) $82,950. D) $3,950. E) $4,050.
