8-65
78. The May cash disbursements for manufacturing overhead on the manufacturing overhead
budget should be:
Salge Inc. bases its manufacturing overhead budget on budgeted direct labor– hours. The
variable overhead rate is $8.10 per direct labor-hour. The company’s budgeted fixed
manufacturing overhead is $74,730 per month, which includes depreciation of $20,670. All
other fixed manufacturing overhead costs represent current cash flows. The direct labor
budget indicates that 5,300 direct labor-hours will be required in September.
79. The September cash disbursements for manufacturing overhead on the manufacturing
overhead budget should be:
8-67
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:
8-70
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:
8-72
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.
87. The excess (deficiency) of cash available over disbursements for November will be:
88. To attain its desired ending cash balance for November, the company needs to borrow:
Deshaies Corporation is preparing its cash budget for November. The budgeted beginning
cash balance is $10,000. Budgeted cash receipts total $100,000 and budgeted cash
disbursements total $104,000. The desired ending cash balance is $30,000.
89. The excess (deficiency) of cash available over disbursements for November is:
90. To attain its desired ending cash balance for November, the company should borrow:
8-76
Carpon Lumber sells lumber and general building supplies to building contractors in a
medium-sized town in Montana. Data regarding the store’s operations follow:
• Sales are budgeted at $340,000 for November, $350,000 for December, and $370,000 for
January.
• Collections are expected to be 55% in the month of sale, 44% in the month following the
sale, and 1% uncollectible.
• The cost of goods sold is 75% of sales.
• The company desires to have an ending merchandise inventory equal to 60% of the next
month’s cost of goods sold. Payment for merchandise is made in the month following the
purchase.
• Other monthly expenses to be paid in cash are $21,100.
• Monthly depreciation is $19,000.
• Ignore taxes.
91. The net income for December would be:
92. The cash balance at the end of December would be:
93. The accounts receivable balance, net of uncollectible accounts, at the end of December
would be:
94. Accounts payable at the end of December would be:
8-80
95. Retained earnings at the end of December would be:
Essay Questions