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103. Noel Enterprises has budgeted sales in units for the next five months as follows:
June 6,800 units
July 5,400 units
August 7,200 units
September 4,600 units
October 3,800 units
Past experience has shown that the ending inventory for each month must be equal to 10% of the
next month's sales in units. The inventory on May 31 contained 400 units. The company needs to
prepare a production budget for the second quarter of the year.
The desired ending inventory for August is:
104. Sarter Corporation is in the process of preparing its annual budget. The following beginning
and ending inventory levels are planned for the year.
Beginning Inventory Ending Inventory
Finished goods (units) 70,000 20,000
Raw material (grams) 50,000 60,000
Each unit of finished goods requires 3 grams of raw material. The company plans to sell 880,000
units during the year.
The number of units the company would have to manufacture during the year would be:
105. Sarter Corporation is in the process of preparing its annual budget. The following beginning
and ending inventory levels are planned for the year.
Beginning Inventory Ending Inventory
Finished goods (units) 70,000 20,000
Raw material (grams) 50,000 60,000
Each unit of finished goods requires 3 grams of raw material. The company plans to sell 880,000
units during the year.
How much of the raw material should the company purchase during the year?
106. The TS Corporation has budgeted sales for the year as follows:
Quarter
1 2 3 4
Sales in units 10,000 12,000 14,000 16,000
The ending inventory of finished goods for each quarter should equal 25% of the next quarter's
budgeted sales in units. The finished goods inventory at the start of the year is 2,500 units. Four
pounds of raw materials are required for each unit produced. Raw materials on hand at the start of
the year total 4,200 pounds. The raw materials inventory at the end of each quarter should equal 10%
of the next quarter's production needs in material.
Scheduled production for the third quarter should be:
107. The TS Corporation has budgeted sales for the year as follows:
Quarter
1 2 3 4
Sales in units 10,000 12,000 14,000 16,000
The ending inventory of finished goods for each quarter should equal 25% of the next quarter's
budgeted sales in units. The finished goods inventory at the start of the year is 2,500 units. Four
pounds of raw materials are required for each unit produced. Raw materials on hand at the start of
the year total 4,200 pounds. The raw materials inventory at the end of each quarter should equal 10%
of the next quarter's production needs in material.
Scheduled purchases of raw materials for the second quarter should be:
108. Roberts Corporation manufactures home cleaning products. One of the products, Quickclean,
requires 2 pounds of Material A and 5 pounds of Material B per unit manufactured. Material A is
purchased from the supplier for $0.30 per pound and Material B is purchased for $0.50 per pound.
The finished goods inventory on hand at the end of each month should equal 4,000 units plus 25% of
the next month's sales. The raw materials inventory on hand at the end of each month (for either
Material A or Material B) should equal 80% of the following month's production needs.
The production budget calls for 26,000 units of Quickclean to be manufactured in June and 32,000
units of Quickclean to be manufactured in July. On May 31 there will be 41,600 pounds of Material A
and 104,000 pounds of Material B in inventory.
Assume that on January 1 the inventory of Quickclean was 8,000 units. Expected sales in January
are 14,000 units and expected sales in February are 18,000 units. The number of units needed to be
produced in January would be:
109. Roberts Corporation manufactures home cleaning products. One of the products, Quickclean,
requires 2 pounds of Material A and 5 pounds of Material B per unit manufactured. Material A is
purchased from the supplier for $0.30 per pound and Material B is purchased for $0.50 per pound.
The finished goods inventory on hand at the end of each month should equal 4,000 units plus 25% of
the next month's sales. The raw materials inventory on hand at the end of each month (for either
Material A or Material B) should equal 80% of the following month's production needs.
The production budget calls for 26,000 units of Quickclean to be manufactured in June and 32,000
units of Quickclean to be manufactured in July. On May 31 there will be 41,600 pounds of Material A
and 104,000 pounds of Material B in inventory.
The number of pounds of Material A needed for production during June would be:
110. Roberts Corporation manufactures home cleaning products. One of the products, Quickclean,
requires 2 pounds of Material A and 5 pounds of Material B per unit manufactured. Material A is
purchased from the supplier for $0.30 per pound and Material B is purchased for $0.50 per pound.
The finished goods inventory on hand at the end of each month should equal 4,000 units plus 25% of
the next month's sales. The raw materials inventory on hand at the end of each month (for either
Material A or Material B) should equal 80% of the following month's production needs.
The production budget calls for 26,000 units of Quickclean to be manufactured in June and 32,000
units of Quickclean to be manufactured in July. On May 31 there will be 41,600 pounds of Material A
and 104,000 pounds of Material B in inventory.
The number of pounds of Material B to be purchased during June would be:
111. LFM Corporation makes and sells a product called Product WZ. Each unit of Product WZ
requires 3.5 hours of direct labor at the rate of $16.00 per direct labor-hour. Management would like
you to prepare a Direct Labor Budget for June.
The budgeted direct labor cost per unit of Product WZ would be:
112. LFM Corporation makes and sells a product called Product WZ. Each unit of Product WZ
requires 3.5 hours of direct labor at the rate of $16.00 per direct labor-hour. Management would like
you to prepare a Direct Labor Budget for June.
The company plans to sell 31,000 units of Product WZ in June. The finished goods inventories on
June 1 and June 30 are budgeted to be 100 and 600 units, respectively. Budgeted direct labor costs
for June would be:
113. Cashan Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 1.5
kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is
as follows:
August 24,500 units
September 24,700 units
October 24,600 units
November 26,400 units
December 24,500 units
The company wants to maintain monthly ending inventories of Jurislon equal to 30% of the following
month's production needs. On July 31, this requirement was not met since only 10,400 kilograms of
Jurislon were on hand. The cost of Jurislon is $4.00 per kilogram. The company wants to prepare a
Direct Materials Purchase Budget for the next five months.
The desired ending inventory of Jurislon for September is:
114. Cashan Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 1.5
kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is
as follows:
August 24,500 units
September 24,700 units
October 24,600 units
November 26,400 units
December 24,500 units
The company wants to maintain monthly ending inventories of Jurislon equal to 30% of the following
month's production needs. On July 31, this requirement was not met since only 10,400 kilograms of
Jurislon were on hand. The cost of Jurislon is $4.00 per kilogram. The company wants to prepare a
Direct Materials Purchase Budget for the next five months.
The total cost of Jurislon to be purchased in August is:
115. Cowles Corporation Inc., makes and sells a single product, Product R. Three yards of
Material K are needed to make one unit of Product R. Budgeted production of Product R for the next
five months is as follows:
August 13,000 units
September 13,500 units
October 14,500 units
November 13,600 units
December 12,900 units
The company wants to maintain monthly ending inventories of Material K equal to 30% of the
following month's production needs. On July 31, this requirement was not met because only 3,500
yards of Material K were on hand. The cost of Material K is $0.80 per yard. The company wants to
prepare a Direct Materials Purchase Budget for the rest of the year.
The total cost of Material K to be purchased in August is:
116. Cowles Corporation Inc., makes and sells a single product, Product R. Three yards of
Material K are needed to make one unit of Product R. Budgeted production of Product R for the next
five months is as follows:
August 13,000 units
September 13,500 units
October 14,500 units
November 13,600 units
December 12,900 units
The company wants to maintain monthly ending inventories of Material K equal to 30% of the
following month's production needs. On July 31, this requirement was not met because only 3,500
yards of Material K were on hand. The cost of Material K is $0.80 per yard. The company wants to
prepare a Direct Materials Purchase Budget for the rest of the year.
The desired ending inventory of Material K for September is:
117. Cowles Corporation Inc., makes and sells a single product, Product R. Three yards of
Material K are needed to make one unit of Product R. Budgeted production of Product R for the next
five months is as follows:
August 13,000 units
September 13,500 units
October 14,500 units
November 13,600 units
December 12,900 units
The company wants to maintain monthly ending inventories of Material K equal to 30% of the
following month's production needs. On July 31, this requirement was not met because only 3,500
yards of Material K were on hand. The cost of Material K is $0.80 per yard. The company wants to
prepare a Direct Materials Purchase Budget for the rest of the year.
The total needs (i.e., production requirements plus desired ending inventory) of Material K for
November are:
118. Adi Manufacturing Corporation is estimating the following raw material purchases for the final
four months of the year:
September $800,000
October $920,000
November $840,000
December $760,000
At Adi, 30% of raw materials purchases are normally paid for in the month of purchase. The
remaining 70% is paid for in the month following the purchase.
How much cash should Adi expect to pay out for raw material purchases during November?
119. Adi Manufacturing Corporation is estimating the following raw material purchases for the final
four months of the year:
September $800,000
October $920,000
November $840,000
December $760,000
At Adi, 30% of raw materials purchases are normally paid for in the month of purchase. The
remaining 70% is paid for in the month following the purchase.
In Adi's budgeted balance sheet at December 31, at what amount will accounts payable for raw
materials be shown?
120. The Gerald Corporation makes and sells a single product called a Clop. Each Clop requires
1.1 direct labor-hours at $8.20 per direct labor-hour. The direct labor workforce is fully adjusted each
month to the required workload. The company is preparing a Direct Labor Budget for the first quarter
of the year.
The budgeted direct labor cost per Clop is closest to:
121. The Gerald Corporation makes and sells a single product called a Clop. Each Clop requires
1.1 direct labor-hours at $8.20 per direct labor-hour. The direct labor workforce is fully adjusted each
month to the required workload. The company is preparing a Direct Labor Budget for the first quarter
of the year.
If the company has budgeted to produce 20,000 Clops in January, then the budgeted direct labor cost
for January is:
122. The Gerald Corporation makes and sells a single product called a Clop. Each Clop requires
1.1 direct labor-hours at $8.20 per direct labor-hour. The direct labor workforce is fully adjusted each
month to the required workload. The company is preparing a Direct Labor Budget for the first quarter
of the year.
If the budgeted direct labor cost for February is $162,360, then the budgeted production of Clops for
February is:
123. The LFG Corporation makes and sells a single product, Product T. Each unit of Product T
requires 1.4 direct labor-hours at a rate of $9.80 per direct labor-hour. The direct labor workforce is
fully adjusted each month to the required workload. LFG Corporation needs to prepare a Direct Labor
Budget for the second quarter of next year.
The budgeted direct labor cost per unit of Product T is closest to:
124. The LFG Corporation makes and sells a single product, Product T. Each unit of Product T
requires 1.4 direct labor-hours at a rate of $9.80 per direct labor-hour. The direct labor workforce is
fully adjusted each month to the required workload. LFG Corporation needs to prepare a Direct Labor
Budget for the second quarter of next year.
The company has budgeted to produce 24,000 units of Product T in June. The finished goods
inventories on June 1 and June 30 were budgeted at 600 and 800 units, respectively. Budgeted direct
labor costs for June would be:
125. The Covey Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter
of the year. The budgeted variable manufacturing overhead rate is $4.00 per direct labor-hour; the
budgeted fixed manufacturing overhead is $64,000 per month, of which $18,000 is factory
depreciation.
If the budgeted direct labor time for October is 8,000 hours, then the total budgeted manufacturing
overhead for October is:
126. The Covey Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter
of the year. The budgeted variable manufacturing overhead rate is $4.00 per direct labor-hour; the
budgeted fixed manufacturing overhead is $64,000 per month, of which $18,000 is factory
depreciation.
If the budgeted cash disbursements for manufacturing overhead for November are $90,000, then the
budgeted direct labor-hours for November must be:
