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Balmforth Products, Inc. makes and sells a single product called a Bik. It takes three yards
of Material A to make one Bik. Budgeted production of Biks for the next five months is as follows:
The company wants to maintain monthly ending inventories of Material A equal to 20% of the
following month’s production needs. On January 31, this target had not been attained since only
2,000 yards of Material A were on hand. The cost of Material A is $0.80 per yard. The company
wants to prepare a Direct Materials Purchases Budget.
68. The total cost of Material A to be purchased in February is:
69. The desired ending inventory of Material A for the month of March is:
70. The total needs (i.e., production requirements plus desired ending inventory) of Material
A for the month of May are:
71. If the budgeted direct labor cost for May is $161,280, then the budgeted production of
Product A for May is:
72. The budgeted direct labor cost per unit of Product A is:
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73. The company has budgeted to produce 20,000 units of Product A in June. The finished
goods inventories on June 1 and June 30 were budgeted at 400 and 600 units, respectively.
Budgeted direct labor cost for June is:
Davol Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter
of the year. The budgeted variable manufacturing overhead rate is $6.80 per direct labor-hour;
the budgeted fixed manufacturing overhead is $72,000 per month, of which $20,000 is factory
depreciation.
74. If the budgeted direct labor time for October is 5,000 hours, then the total budgeted
manufacturing overhead for October is:
75. If the budgeted direct labor time for November is 5,000 hours, then the total budgeted
cash disbursements for November must be:
76. If the budgeted direct labor time for December is 4,000 hours, then the predetermined
manufacturing overhead per direct labor-hour for December would be:
77. The company recomputes its predetermined overhead rate every month. The
predetermined overhead rate for May should be:
78. The May cash disbursements for manufacturing overhead on the manufacturing overhead
budget should be:
79. The September cash disbursements for manufacturing overhead on the manufacturing
overhead budget should be:
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80. The company recomputes its predetermined overhead rate every month. The
predetermined overhead rate for September should be:
Porl Corporation makes and sells a single product called a Yute. The company is in the
process of preparing its Selling and Administrative Expense Budget for the last quarter of the
year. The following budget data are available:
All of these expenses (except depreciation) are paid in cash in the month they are incurred.
81. If the company has budgeted to sell 22,000 Yutes in November, then the total budgeted
selling and administrative expenses for November would be:
82. If the company has budgeted to sell 19,000 Yutes in December, then the budgeted total
cash disbursements for selling and administrative expenses for December would be:
83. If the total budgeted selling and administrative expense for October is $409,000, then
how many Yutes does the company plan to sell in October?
The Gomez Company, a merchandising firm, has budgeted its activity for December
according to the following information:
• Sales at $500,000, all for cash.
• Merchandise Inventory on November 30 was $250,000.
• The cash balance at December 1 was $20,000.
• Selling and administrative expenses are budgeted at $50,000 for December and are paid for in
cash.
• Budgeted depreciation for December is $30,000.
• The planned merchandise inventory on December 31 is $260,000.
• The cost of goods sold represents 75% of the selling price.
• All purchases are paid for in cash.
84. The budgeted cash receipts for December are:
85. The budgeted cash disbursements for December are:
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86. The budgeted net income for December is:
Dengel Inc. is working on its cash budget for November. The budgeted beginning cash
balance is $24,000. Budgeted cash receipts total $177,000 and budgeted cash disbursements
total $167,000. The desired ending cash balance is $50,000.