41) Parwin Corporation plans to sell 23,000 units during August. If the company has 8,000 units
on hand at the start of the month, and plans to have 9,000 units on hand at the end of the month,
how many units must be produced during the month?
A) 24,000
B) 22,000
C) 32,000
D) 31,000
42) Frolic Corporation has budgeted sales and production over the next quarter as follows:
July
September
Sales in units
70,000
?
Production in units
73,250
91,750
–
The company has 17,500 units of product on hand at July 1. 25% of the next month’s sales in units
should be on hand at the end of each month. October sales are expected to be 97,000 units.
Budgeted sales for September would be (in units):
A) 88,000
B) 90,000
C) 86,000
D) 84,000
–
83,000 + 0.25X – 20,750 = 84,750
0.25X = 22,500
X = 90,000
or
24,250 + X – 0.25X = 91,750
0.75X = 67,500
43) The following information was taken from the production budget of Piwte Corporation for
next quarter:
January
February
March
Units to be produced
128,000
140,000
152,000
Desired ending inventory of finished goods
30,000
36,000
38,000
–
How many units is the company expecting to sell in the month of February?
A) 132,000
B) 138,000
C) 135,000
D) 134,000
February
Budgeted unit sales
Add desired ending finished goods inventory
Total needs
36,000 + X
Less beginning finished goods inventory
Required production in units
–
44) Fiwrt Corporation manufactures and sells stainless steel coffee mugs. Expected mug sales
Fiwrt (in units) for the next three months are as follows:
October
November
December
Budgeted unit sales
30,000
36,000
34,000
–
Fiwrt likes to maintain a finished goods inventory equal to 30% of the next month’s estimated
sales. How many mugs should Fiwrt plan on producing during the month of November?
A) 35,400 mugs
B) 26,800 mugs
C) 36,000 mugs
D) 34,300 mugs
Budgeted unit sales
Total needs
(36,000 × 30%)
Required production in units
–
45) Masde Corporation produces and sells Product CharlieD. To guard against stockouts, the
company requires that 25% of the next month’s sales be on hand at the end of each month.
Budgeted sales of Product CharlieD over the next four months are:
June
July
August
September
Budgeted sales in units
40,000
60,000
50,000
80,000
–
Budgeted production for August would be:
A) 57,500 units
B) 107,000 units
C) 77,000 units
D) 80,000 units
Budgeted unit sales
Total needs
(50,000 × 25%)
Required production in units
–
46) Paradise Corporation budgets on an annual basis for its fiscal year. The following beginning
and ending inventory levels (in units) are planned for next year.
Beginning Inventory
Ending Inventory
Raw material*
30,000
40,000
Finished goods
70,000
60,000
–
* Three pounds of raw material are needed to produce each unit of finished product.
If Paradise Corporation plans to sell 510,000 units during next year, the number of units it would
have to manufacture during the year would be:
A) 500,000 units
B) 520,000 units
C) 510,000 units
D) 570,000 units
47) Stut Corporation, a retailer, plans to sell 28,000 units of Product X during the month of August.
If the company has 6,000 units on hand at the start of the month, and plans to have 9,000 units on
hand at the end of the month, how many units of Product X must be purchased from the supplier
during the month?
A) 37,000
B) 25,000
C) 31,000
D) 28,000
48) Douglas Corporation plans to sell 24,000 units of Product A during July and 30,000 units
during August. Sales of Product A during June were 25,000 units. Past experience has shown that
end-of-month inventory should equal 3,000 units plus 30% of the next month’s sales. On June 30
this requirement was met. Based on these data, how many units of Product A must be produced
during the month of July?
A) 28,800
B) 22,200
C) 24,000
D) 25,800
49) The following information relates to Mapfes Manufacturing Corporation for next quarter:
January
February
March
Expected sales (in units)
440,000
390,000
380,000
Desired ending finished goods inventory (in units)
39,000
38,000
40,000
–
How many units should the company plan on producing for the month of February?
A) 428,000 units
B) 391,000 units
C) 390,000 units
D) 389,000 units
Budgeted unit sales
Add desired ending finished goods inventory
Total needs
Less beginning finished goods inventory
Required production in units
–
50) Jannusch Corporation makes one product. Budgeted unit sales for July, August, September,
and October are 10,000, 11,600, 13,300, and 12,700 units, respectively. The ending finished goods
inventory should equal 20% of the following month’s sales. The budgeted required production for
August is closest to:
A) 11,600 units
B) 11,940 units
C) 14,260 units
D) 16,580 units
51) On October 1, Gala Corporation has 300 units of Product XYZ on hand. The company plans to
sell 1,200 units of Product XYZ during October, and plans to have 500 units on hand October 31.
How many units of Product XYZ must be produced during October?
A) 1,400
B) 1,500
C) 1,000
D) 2,000
52) BW Department Store expects to generate the following sales for the next three months:
July
August
September
Expected sales
$490,000
$540,000
$580,000
–
BW’s cost of goods sold is 60% of sales dollars. At the end of each month, BW wants a
merchandise inventory balance equal to 25% of the following month’s expected cost of goods sold.
What dollar amount of merchandise inventory should BW plan to purchase in August?
A) $330,000
B) $314,600
C) $352,800
D) $327,800
Budgeted cost of goods sold ($540,000 × 60%)
Total needs
Required purchases
–
53) Cardle Corporation makes one product. Budgeted unit sales are shown below:
January
February
March
April
Budgeted unit sales
7,300
8,600
10,100
13,600
–
The ending finished goods inventory should equal 30% of the following month’s sales. The
budgeted required production for February is closest to:
A) 11,630 units
B) 14,210 units
C) 9,050 units
D) 8,600 units
Budgeted sales in units
Add desired ending inventory*
Total needs
Less beginning inventory**
Required production
–
* March sales of 10,100 units × 30% = 3,030 units
54) Sleeter Corporation makes one product and it provided the following information to help
prepare the master budget for the next four months of operations:
a. Budgeted unit sales for April, May, June, and July are 7,500, 11,900, 10,800, and 14,800 units,
respectively. All sales are on credit.
b. The ending finished goods inventory equals 30% of the following month’s sales.
c. The ending raw materials inventory equals 30% of the following month’s raw materials
production needs. Each unit of finished goods requires 6 pounds of raw materials. The raw
materials cost $5.00 per pound.
If 72,000 pounds of raw materials are required for production in June, then the budgeted cost of
raw material purchases for May is closest to:
A) $559,230
B) $455,100
C) $350,970
D) $347,100
55) Reaser Corporation makes one product.
April
May
June
July
Budgeted unit sales
8,400
8,700
12,600
13,100
–
Each unit of finished goods requires 4 pounds of raw materials. The ending finished goods
inventory equals 10% of the following month’s sales. The ending raw materials inventory equals
40% of the following month’s raw materials production needs. If 50,600 pounds of raw materials
are required for production in June, then the budgeted raw material purchases for May is closest to:
A) 56,600 pounds
B) 42,056 pounds
C) 71,144 pounds
D) 36,360 pounds
Budgeted sales in units
Add desired ending inventory*
Total needs
Less beginning inventory**
Required production
–
56) Bentsen Corporation makes one product.
July
August
September
October
Budgeted unit sales
8,500
9,000
13,900
11,100
–
The ending finished goods inventory equals 40% of the following month’s sales. The ending raw
materials inventory equals 10% of the following month’s raw materials production needs. Each
unit of finished goods requires 6 pounds of raw materials. The raw materials cost $2.00 per pound.
If 76,680 pounds of raw materials are required for production in September, then the budgeted cost
of raw material purchases for August is closest to:
A) $133,704
B) $131,520
C) $160,008
D) $146,856
Budgeted sales in units
Add desired ending inventory*
Total needs
Less beginning inventory**
–
57) Sill Corporation makes one product. Budgeted unit sales for January, February, March, and
April are 9,900, 11,400, 11,900, and 13,400 units, respectively. The ending finished goods
inventory equals 20% of the following month’s sales. The ending raw materials inventory equals
40% of the following month’s raw materials production needs. Each unit of finished goods requires
5 pounds of raw materials. If 61,000 pounds of raw materials are required for production in March,
then the budgeted raw material purchases for February is closest to:
A) 58,900 pounds
B) 104,900 pounds
C) 57,500 pounds
D) 81,900 pounds