Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
31. The manufacturing overhead budget at Latronica Corporation is based on budgeted direct
labor-hours. The direct labor budget indicates that 7,100 direct labor-hours will be required in
August. The variable overhead rate is $8.60 per direct labor-hour. The company's budgeted fixed
manufacturing overhead is $132,770 per month, which includes depreciation of $24,850. 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:
32. Avitia Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The
direct labor budget indicates that 3,700 direct labor-hours will be required in September. The
variable overhead rate is $5.70 per direct labor-hour. The company's budgeted fixed
manufacturing overhead is $48,100 per month, which includes depreciation of $5,550. All other
fixed manufacturing overhead costs represent current cash flows. The company recomputes its
predetermined overhead rate every month. The predetermined overhead rate for September
should be:
33. The manufacturing overhead budget at Cutchin Corporation is based on budgeted direct
labor-hours. The direct labor budget indicates that 2,800 direct labor-hours will be required in
September. The variable overhead rate is $7.00 per direct labor-hour. The company's budgeted
fixed manufacturing overhead is $43,120 per month, which includes depreciation of $3,640. All
other fixed manufacturing overhead costs represent current cash flows. The September cash
disbursements for manufacturing overhead on the manufacturing overhead budget should be:
34. The selling and administrative expense budget of Breckinridge Corporation is based on
budgeted unit sales, which are 5,500 units for June. The variable selling and administrative
expense is $1.00 per unit. The budgeted fixed selling and administrative expense is $101,200 per
month, which includes depreciation of $6,050 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 June selling and administrative expense budget should be:
35. Lunderville Inc. bases its selling and administrative expense budget on budgeted unit
sales. The sales budget shows 3,200 units are planned to be sold in December. The variable
selling and administrative expense is $3.10 per unit. The budgeted fixed selling and
administrative expense is $60,800 per month, which includes depreciation of $6,720 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 December selling and
administrative expense budget should be:
36. The Carlquist Company makes and sells a product called Product K. Each unit of Product
K sells for $24 dollars and has a unit variable cost of $18. The company has budgeted the
following data for November:
• Sales of $1,152,200, all in cash.
• A cash balance on November 1 of $48,000.
• Cash disbursements (other than interest) during November of $1,160,000.
• A minimum cash balance on November 30 of $60,000.
If necessary, the company will borrow cash from a bank. The borrowing will be in multiples of
$1,000 and will bear interest at 2% per month. All borrowing will take place at the beginning of
the month. The November interest will be paid in cash during November.
The amount of cash needed to be borrowed on November 1 to cover all cash disbursements and
to obtain the desired November 30 cash balance is:
37. Mosbey Inc. is working on its cash budget for June. The budgeted beginning cash balance
is $16,000. Budgeted cash receipts total $188,000 and budgeted cash disbursements total
$187,000. The desired ending cash balance is $40,000. The excess (deficiency) of cash available
over disbursements for June will be:
38. Avril Company makes collections on sales according to the following schedule:
The following sales are expected:
Cash collections in March should be budgeted to be:
39. Deschambault Inc. is working on its cash budget for December. The budgeted beginning
cash balance is $14,000. Budgeted cash receipts total $127,000 and budgeted cash
disbursements total $126,000. The desired ending cash balance is $40,000. To attain its desired
ending cash balance for December, the company needs to borrow:
9-30
Diltex Farm Supply is located in a small town in the rural west. Data regarding the store's
operations follow:
ο Sales are budgeted at $220,000 for November, $200,000 for December, and $210,000 for
January.
ο Collections are expected to be 70% in the month of sale, 27% in the month following the sale,
and 3% uncollectible.
ο The cost of goods sold is 65% of sales.
ο The company desires to have an ending merchandise inventory at the end of each month
equal to 50% of the next month's cost of goods sold. Payment for merchandise is made in the
month following the purchase.
ο Other monthly expenses to be paid in cash are $22,500.
ο Monthly depreciation is $19,000.
ο Ignore taxes.
40. Expected cash collections in December are:
41. The cost of December merchandise purchases would be:
42. December cash disbursements for merchandise purchases would be:
43. The difference between cash receipts and cash disbursements for December would be:
44. The net income for December would be:
45. The cash balance at the end of December would be:
46. The accounts receivable balance, net of uncollectible accounts, at the end of December
would be:
47. Accounts payable at the end of December would be:
48. Retained earnings at the end of December would be:
9-40
Brarin Corporation is a small wholesaler of gourmet food products. Data regarding the
store's operations follow:
ο Sales are budgeted at $340,000 for November, $360,000 for December, and $350,000 for
January.
ο Collections are expected to be 55% in the month of sale, 44% in the month following the sale,
and 1% uncollectible.
ο The cost of goods sold is 80% of sales.
ο The company would like to maintain ending merchandise inventories equal to 70% of the next
month's cost of goods sold. Payment for merchandise is made in the month following the
purchase.
ο Other monthly expenses to be paid in cash are $23,100.
ο Monthly depreciation is $21,000.
ο Ignore taxes.
