7-101
47.
On November 1, Barnes Corporation has 8,000 units of Product A on hand. During the month,
the company plans to sell 30,000 units of Product A, and plans to have 6,500 units on hand at
end of the month. How many units of Product A must be produced during the month?
7-102
48.
Mutskic Corporation produces and sells Product BetaC. To guard against stockouts, the
company requires that 30% of the next month’s sales be on hand at the end of each month.
Budgeted sales of Product BetaC over the next four months are:
June
July
August
September
Budgeted sales in units
60,000
70,000
80,000
90,000
Budgeted unit sales
Total needs
Budgeted production for August would be:
7-103
49.
Parsons Corporation plans to sell 18,000 units during August. If the company has 5,500 units
on hand at the start of the month, and plans to have 6,000 units on hand at the end of the
month, how many units must be produced during the month?
50.
Starg Corporation, a retailer, plans to sell 25,000 units of Product X during the month of
August. If the company has 9,000 units on hand at the start of the month, and plans to have
7,000 units on hand at the end of the month, how many units of Product X must be purchased
from the supplier during the month?
7-104
51.
The following information relates to Marter Manufacturing Corporation for next quarter:
January
February
March
Expected
sales (in
units)
450,000
360,000
380,000
Desired
ending
finished
goods
inventory
(in
units)
36,000
38,000
41,000
How many units should the company plan on producing for the month of February?
7-105
52.
Shocker Corporation’s sales budget shows quarterly sales for the next year as follows:
Unit sales
Quarter 1
10,000 units
Quarter 2
8,000 units
Quarter 3
12,000 units
Quarter 4
14,000 units
Budgeted unit sales
Add desired ending finished goods inventory (12,000 × 20%)
Total needs
Less beginning finished goods inventory (8,000 × 20%)
Required production in units
Corporation policy is to have a finished goods inventory at the end of each quarter equal to
20% of the next quarter’s sales. Budgeted production for the second quarter of the next year
would be:
7-106
53.
The following are budgeted data:
Sales
(units)
Production
(units)
April
15,000
18,000
May
20,000
19,000
June
18,000
16,000
Two pounds of material are 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. Purchases of
raw materials for May should be:
7-107
54.
G Products Inc., manufactures garlic gravy. G’s production budget indicated the following units
(jars) of gravy to be produced for the upcoming months indicated:
April
May
June
Units to be produced
82,000
80,000
75,000
Raw materials required per unit
Five grams of garlic are needed for every jar of gravy. G also likes to have enough garlic on
hand at the end of the month to cover 10% of the next month’s production requirements for
garlic. How many grams of garlic should G plan on purchasing during the month of May?
7-108
55.
Marst Corporation’s budgeted production in units and budgeted raw materials purchases over
the next three months are given below:
January
February
March
Budgeted production (in units)
50,000
?
80,000
Budgeted raw materials purchases (in pounds)
106,000
132,000
188,000
Raw materials to be purchased
Two pounds of raw materials are required to produce one unit of product. The company wants
raw materials on hand at the end of each month equal to 30% of the following month’s
production needs. The company is expected to have 30,000 pounds of raw materials on hand
on January 1. Budgeted production for February should be:
56.
The following are budgeted data:
January
February
March
Sales in units
16,000
21,000
20,000
Production in units
17,000
19,000
18,000
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. Purchases of raw
materials for February would be budgeted to be:
Required production in units
Raw materials required per unit
(18,000 × 1 × 20%)
Total raw materials needs
Raw materials to be purchased
7-110
57.
Rhett Corporation manufactures and sells dress shirts. Each shirt (unit) requires 3 yards of
cloth. Selected data from Rhett‘s master budget for next quarter are shown below:
April
May
June
Budgeted sales (in units)
26,000
28,000
32,000
Budgeted production (in units)
28,000
32,000
36,000
Desired ending inventory of cloth (in yards)
2,100
2,800
3,000
Required production in units
Raw materials required per unit
3
Total raw materials needs
Less beginning raw materials inventory
2,100
Raw materials to be purchased
How many yards of cloth should Rhett plan on purchasing in May?
7-111
58.
Prester Corporation has budgeted production for next year as follows:
Quarter
First
Second
Third
Fourth
Production in units
60,000
70,000
80,000
90,000
Two pounds of material A are required for each unit produced. The company has a policy of
maintaining a stock of material A on hand at the end of each quarter equal to 25% of the next
quarter’s production needs for material A. A total of 30,000 pounds of material A are on hand
to start the year. Budgeted purchases of material A for the second quarter would be:
7-112
59.
Milano Corporation is working on its direct labor budget for the next two months. Each unit of
output requires 0.50 direct labor-hours. The direct labor rate is $9.80 per direct labor-hour. The
production budget calls for producing 6,400 units in October and 6,300 units in November. If
the direct labor work force is fully adjusted to the total direct labor-hours needed each month,
what would be the total combined direct labor cost for the two months?
7-113
60.
Morie Corporation is working on its direct labor budget for the next two months. Each unit of
output requires 0.75 direct labor-hours. The direct labor rate is $8.10 per direct labor-hour. The
production budget calls for producing 2,000 units in March and 2,300 units in April. The
company guarantees its direct labor workers a 40-hour paid work week. With the number of
workers currently employed, that means that the company is committed to paying its direct
labor work force for at least 1,760 hours in total each month even if there is not enough work
to keep them busy. What would be the total combined direct labor cost for the two months?
7-114
61.
For July, White Corporation has budgeted production of 6,000 units. Each unit requires 0.10
direct labor-hours at a cost of $8.50 per direct labor-hour. How much will White Corporation
budget for labor in July?
7-115
62.
Triste Corporation manufactures and sells women’s skirts. Each skirt (unit) requires 2.6 yards
of cloth. Selected data from Triste’s master budget for next quarter are shown below:
July
August
September
Budgeted sales (in
units)
7,000
9,000
10,000
Budgeted production
(in units)
8,000
10,500
14,000
September
Each unit requires 1.6 hours of direct labor, and the average hourly cost of Triste’s direct labor
is $15. What is the cost of Triste Corporation’s direct labor in September?
7-116
63.
The manufacturing overhead budget at Amrein Corporation is based on budgeted direct labor-
hours. The direct labor budget indicates that 4,900 direct labor-hours will be required in
August. The variable overhead rate is $9.40 per direct labor-hour. The company’s budgeted
fixed manufacturing overhead is $96,040 per month, which includes depreciation of $7,350. All
other fixed manufacturing overhead costs represent current cash flows. The August cash
disbursements for manufacturing overhead on the manufacturing overhead budget should be:
7-117
64.
The manufacturing overhead budget at Pendley Corporation is based on budgeted direct
labor-hours. The direct labor budget indicates that 8,900 direct labor-hours will be required in
August. The variable overhead rate is $5.50 per direct labor-hour. The company’s budgeted
fixed manufacturing overhead is $133,500 per month, which includes depreciation of $30,260.
All other fixed manufacturing overhead costs represent current cash flows. The company
recomputes its predetermined overhead rate every month. The predetermined overhead rate
for August should be:
7-118
65.
Axsom Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The
direct labor budget indicates that 1,300 direct labor-hours will be required in March. The
variable overhead rate is $8.90 per direct labor-hour. The company’s budgeted fixed
manufacturing overhead is $20,020 per month, which includes depreciation of $2,600. All
other fixed manufacturing overhead costs represent current cash flows. The company
recomputes its predetermined overhead rate every month. The predetermined overhead rate
for March should be:
7-119
66.
Morrish Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The
direct labor budget indicates that 7,100 direct labor-hours will be required in January. The
variable overhead rate is $1.80 per direct labor-hour. The company’s budgeted fixed
manufacturing overhead is $102,950 per month, which includes depreciation of $19,880. All
other fixed manufacturing overhead costs represent current cash flows. The January cash
disbursements for manufacturing overhead on the manufacturing overhead budget should be:
7-120
67.
The selling and administrative expense budget of Ruffing Corporation is based on budgeted
unit sales, which are 4,800 units for February. The variable selling and administrative expense
is $8.10 per unit. The budgeted fixed selling and administrative expense is $71,520 per month,
which includes depreciation of $16,800 per month. The remainder of the fixed selling and
administrative expense represents current cash flows. The cash disbursements for selling and
administrative expenses on the February selling and administrative expense budget should
be: