77) Murie Corporation makes one product and has provided the following information:
Budgeted selling price per unit
$
98
per unit sold
Budgeted unit sales, February
11,000
units
Raw materials requirement per unit of output
5
pounds
Raw materials cost
$
3.00
per pound
Direct labor requirement per unit of output
2.5
direct labor-hours
Direct labor wage rate
$
18.00
per direct labor-hour
Predetermined overhead rate (all variable)
$
11.00
per direct labor-hour
Variable selling and administrative expense
$
2.70
per unit sold
Fixed selling and administrative expense
$
80,000
per month
–
The estimated net operating income (loss) for February is closest to:
A) $5,800
B) $42,000
C) $35,500
D) $85,800
Direct materials
pounds
per pound
$
15.00
Direct labor
hours
18.00
per hour
45.00
Manufacturing overhead
hours
11.00
per hour
27.50
Unit product cost
$
87.50
–
78) Wasilko Corporation produces and sells one product
a. The budgeted selling price per unit is $114. Budgeted unit sales for February is 9,900 units.
b. Each unit of finished goods requires 6 pounds of raw materials. The raw materials cost $4.00
per pound.
c. The direct labor wage rate is $24.00 per hour. Each unit of finished goods requires 2.4 direct
labor-hours.
d. Manufacturing overhead is entirely variable and is $9.00 per direct labor-hour.
e. The variable selling and administrative expense per unit sold is $1.60. The fixed selling and
administrative expense per month is $70,000.
The estimated net operating income (loss) for February is closest to:
A) $50,000
B) $91,080
C) $21,080
D) $36,920
79) Sedita Inc. is working on its cash budget for July. The budgeted beginning cash balance is
$46,000. Budgeted cash receipts total $175,000 and budgeted cash disbursements total $174,000.
The desired ending cash balance is $50,000. The excess (deficiency) of cash available over
disbursements for July will be:
A) $47,000
B) $221,000
C) $45,000
D) $1,000
80) Sparks Corporation has a cash balance of $18,000 on April 1. The company must maintain a
minimum cash balance of $10,000. During April, expected cash receipts are $98,000. Cash
disbursements during the month are expected to total $112,000. Ignoring interest payments, during
April the company will need to borrow:
A) $8,000
B) $2,000
C) $6,000
D) $4,000
81) Bustillo Inc. is working on its cash budget for March. The budgeted beginning cash balance is
$35,000. Budgeted cash receipts total $142,000 and budgeted cash disbursements total $151,000.
The desired ending cash balance is $30,000. To attain its desired ending cash balance for March,
the company needs to borrow:
A) $0
B) $4,000
C) $56,000
D) $30,000
82) Knappert Corporation makes one product and has provided the following information:
a. Each unit of finished goods requires 3 pounds of raw materials. The raw materials cost $5.00
per pound.
b. The direct labor wage rate is $24.00 per hour. Each unit of finished goods requires 2.8 direct
labor-hours.
c. Manufacturing overhead is entirely variable and is $11.00 per direct labor-hour.
d. The variable selling and administrative expense per unit sold is $3.80. The fixed selling and
administrative expense per month is $50,000.
The unit product cost is closest to:
A) $82.20
B) $93.20
C) $30.80
D) $113.00
83) Fredericksen Corporation makes one product and has provided the following information:
Budgeted sales, February
8,700
units
Raw materials requirement per unit of output
6
pounds
Raw materials cost
$
2.00
per pound
Direct labor requirement per unit of output
2.9
direct labor-hours
Direct labor wage rate
$
21.00
per direct labor-hour
Predetermined overhead rate (all variable)
$
10.00
per direct labor-hour
Variable selling and administrative expense
$
1.10
per unit sold
Fixed selling and administrative expense
$
80,000
per month
–
The estimated cost of goods sold for February is closest to:
A) $886,530
B) $634,230
C) $252,300
D) $721,230
Direct materials
pounds
per pound
$
12.00
Direct labor
hours
21.00
per hour
60.90
Manufacturing overhead
hours
10.00
per hour
29.20
Unit product cost
$
101.90
Unit sales (a)
Unit product cost (b)
$
Estimated cost of goods sold (a) × (b)
$
84) Raimondo Corporation makes one product and has provided the following information:
a. The budgeted selling price per unit is $89. Budgeted unit sales for August is 8,300 units.
b. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.00
per pound.
c. The direct labor wage rate is $21.00 per hour. Each unit of finished goods requires 2.6 direct
labor-hours.
d. Manufacturing overhead is entirely variable and is $7.00 per direct labor-hour.
The estimated cost of goods sold for August is closest to:
A) $519,580
B) $577,680
C) $670,640
D) $151,060
85) Gusler Corporation makes one product and has provided the following information:
Budgeted sales, May
9,500
units
Raw materials requirement per unit of output
2
pounds
Raw materials cost
$
2.00
per pound
Direct labor requirement per unit of output
2.7
direct labor-hours
Direct labor wage rate
$
20.00
per direct labor-hour
Predetermined overhead rate (all variable)
$
10.00
per direct labor-hour
–
The estimated cost of goods sold for May is closest to:
A) $807,500
B) $256,500
C) $646,000
D) $551,000
Direct materials
pounds
per pound
$
4.00
Direct labor
hours
20.00
per hour
54.00
Manufacturing overhead
hours
10.00
per hour
27.00
Unit product cost
$
85.00
–
Unit sales (a)
Unit product cost (b)
$
Estimated cost of goods sold (a) × (b)
$
86) Kesselring Corporation makes one product and has provided the following information to help
prepare the master budget for the next three months of operations:
Budgeted unit sales (all on credit):
July
8,400
August
8,800
September
12,200
–
Raw materials requirement per unit of output
4
pounds
Raw materials cost
$
3.00
per pound
Direct labor requirement per unit of output
2.8
direct labor-hours
Direct labor wage rate
$
18.00
per direct labor-hour
Predetermined overhead rate (all variable)
$
11.00
per direct labor-hour
–
The ending finished goods inventory should equal 40% of the following month’s sales. The
budgeted finished goods inventory balance at the end of August is closest to:
A) $358,192
B) $150,304
C) $304,512
D) $454,816
Direct materials
pounds
per pound
$
12.00
Direct labor
hours
18.00
per hour
50.40
Manufacturing overhead
hours
11.00
per hour
30.80
Unit product cost
$
93.20
–
87) Darke Corporation makes one product and has provided the following information:
a. Budgeted unit sales for October, November, and December are 7,600, 9,000, and 10,100 units
respectively.
b. The ending finished goods inventory equals 40% of the following month’s sales.
c. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $1.00
per pound.
d. The direct labor wage rate is $19.00 per hour. Each unit of finished goods requires 3.0 direct
labor-hours.
e. Manufacturing overhead is entirely variable and is $11.00 per direct labor-hour.
The estimated finished goods inventory balance at the end of November is closest to:
A) $294,920
B) $383,800
C) $133,320
D) $250,480
88) Stefanovich Corporation makes one product. The company has provided the following
information concerning its raw materials needs:
• The ending raw materials inventory should equal 20% of the following month’s raw materials
production needs.
• Each unit of finished goods requires 2 pounds of raw materials.
• The raw materials cost $3.00 per pound.
• The company will need 26,440 pounds of raw material to satisfy production needs in March.
The raw materials inventory balance at the end of February should be closest to:
A) $74,136
B) $14,568
C) $88,704
D) $15,864
89) Harrti Corporation has budgeted for the following sales:
July
445,000
August
580,000
September
615,000
October
890,000
November
730,000
December
690,000
–
Sales are collected as follows: 10% in the month of sale; 60% in the month following the sale; and
the remaining 30% in the second month following the sale. In Razz’s budgeted balance sheet at
December 31, at what amount will accounts receivable be shown?
A) $690,000
B) $219,000
C) $621,000
D) $840,000
December sales accounts receivable ($690,000 × 90%)
$
November sales accounts receivable ($730,000 × 30%)
Total accounts receivable
$
–
90) Um Corporation has provided the following information concerning its raw materials
purchases. The budgeted cost of raw materials purchases in November is $286,032. The company
pays for 40% of its raw materials purchases in the month of purchase and 60% in the following
month. The budgeted accounts payable balance at the end of November is closest to:
A) $114,413
B) $140,333
C) $171,619
D) $286,032
91) Litzinger Corporation makes one product. The ending raw materials inventory should equal
20% of the following month’s raw materials production needs. Each unit of finished goods requires
4 pounds of raw materials. The raw materials cost $1.00 per pound. The company estimates that it
will need 53,720 pounds of raw material to satisfy production needs in June. The raw materials
inventory balance at the end of May should be closest to:
A) $10,744
B) $7,984
C) $50,664
D) $42,680
92) The LaGrange Corporation had the following budgeted sales for the first half of the current
year:
Cash Sales
Credit Sales
January
$
70,000
340,000
February
$
50,000
190,000
March
$
40,000
135,000
April
$
35,000
120,000
May
$
45,000
160,000
June
$
40,000
140,000
–
The company is in the process of preparing a cash budget and must determine the expected cash
collections by month. To this end, the following information has been assembled:
Collections on sales:
60% in month of sale
30% in month following sale
10% in second month following sale
The accounts receivable balance on January 1 of the current year was $70,000, of which $50,000
represents uncollected December sales and $20,000 represents uncollected November sales.
The total cash collected during January by LaGrange Corporation would be:
A) $410,000
B) $254,000
C) $344,000
D) $331,500