130) Which of the following budgets is not a budget that a manufacturer would include in its master
budget?
A) Production budget.
B) Sales budget.
C) Merchandise purchases budget.
D) Cash budget.
E) Direct materials budget.
131) A plan that states the number of units to be produced in a future period, based on the projected unit
sales and inventory considerations, is the:
A) Sales budget.
B) Cash budget.
C) Production budget.
D) Merchandise purchases budget.
E) Manufacturing budget.
For sales
April
May
June
July
240
280
300
240
132) Cahuilla Corporation predicts the following sales in units for the coming four months:
Sales in Units
Each month’s ending Finished Goods Inventory should be 40% of the next month’s sales. March 31
finished goods inventory is 96 units. A finished unit requires five pounds of direct material B at a cost
of $2.00 per pound. The March 31 Raw Materials Inventory has 200 pounds of B. Each month’s
ending Raw Materials Inventory should be 30% of the following month’s production needs. The
budgeted production for May is:
A) 400 units. B) 280 units. C) 288 units. D) 168 units. E) 232 units.
April
May
June
July
240
280
300
240
Less beginning inventory (40% * 280)
133) Cahuilla Corporation predicts the following sales in units for the coming four months:
Sales in Units
Each month’s ending Finished Goods Inventory should be 40% of the next month’s sales. March 31
Finished Goods inventory is 96 units. A finished unit requires five pounds of direct material B at a
cost of $2.00 per pound. The March 31 Raw Materials Inventory has 200 pounds of B. Each
month’s ending Raw Materials Inventory should be 30% of the following month’s production needs.
The budgeted purchases of pounds of direct material B during May should be:
A) 1,008 lbs. B) 1,854 lbs. C) 1,422 lbs. D) 288 lbs. E) 276 lbs.
April
May
June
July
240
280
300
240
134) Cahuilla Corporation predicts the following sales in units for the coming four months:
Sales in Units
Each month’s ending Finished Goods Inventory should be 40% of the next month’s sales. March 31
Finished Goods inventory is 96 units. A finished unit requires five pounds of direct material B at a
cost of $2.00 per pound. The March 31 Raw Materials Inventory has 200 pounds of B. Each
month’s ending Raw Materials Inventory should be 30% of the following month’s production needs.
The budgeted cost of direct material B during May should be:
A) $552. B) $2,844. C) $2,016. D) $3,708. E) $576.
135) Charm Enterprises’ production budget shows the following units to be produced for the coming three
months:
April May June
Units to be produced 2,560 2,88
0
2,76
0
A finished unit requires four ounces of a key direct material. The March 31 Raw Materials Inventory
has 4,032 ounces (oz.) of the material. Each month’s ending Raw Materials Inventory should be 35%
of the following month’s production needs. The materials to be purchased during May should be:
A) 11,352 oz. B) 11,520 oz. C) 7,616 oz. D) 15,384 oz. E) 7,448 oz.
January
February
March
$12,040
$14,150
$10,970
136) Fortune Company’s direct materials budget shows the following cost of materials to be purchased for
the coming three months:
Material purchases
Payments for purchases are expected to be made 50% in the month of purchase and 50% in the
month following purchase. The December Accounts Payable balance is $6,500. The budgeted cash
payments for materials in January are:
A) $6,500. B) $18,540. C) $9,270. D) $13,095. E) $12,520.
137) Memphis Company’s May sales budget calls for sales of $900,000. The store expects to begin May
with $50,000 of inventory and to end the month with $55,000 of inventory. Gross margin is
typically 45% of sales. Compute the budgeted cost of merchandise purchases for May.
A) $500,000. B) $495,000. C) $490,000. D) $460,000. E) $550,000.
January
February
March
$12,040
$14,150
$10,970
138) Fortune Company’s direct materials budget shows the following cost of materials to be purchased for
the coming three months:
Material purchases
Payments for purchases are expected to be made 50% in the month of purchase and 50% in the
month following purchase. The December Accounts Payable balance is $6,500. The expected
January 31 Accounts Payable balance is:
A) $7,075. B) $6,020. C) $12,040. D) $9,270. E) $6,500.
139) 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 not collected. Compute the amount of cash received from credit sales during
the month of May.
A) $592,500. B) $561,500. C) $890,000. D) $652,500. E) $817,500.
140) 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 not collected. Compute the amount of cash received from total sales during
the month of May.
A) $817,500. B) $890,000. C) $592,500. D) $561,500. E) $652,500.
141) 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 not collected. Compute the amount of cash received from credit sales during
the month of June.
A) $561,500. B) $890,000. C) $817,500. D) $652,500. E) $592,500.
142) 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 not collected. Compute the amount of cash received from total sales during
the month of June.
A) $890,000. B) $561,500. C) $592,500. D) $652,500. E) $817,500.