Question 1

Pabon Corporation makes one product. Budgeted unit sales for August and September are 11,100 and 12,600 units, respectively. The ending finished goods inventory equals 40% of the following month's sales. The direct labor wage rate is $19.00 per hour. Each unit of finished goods requires 2.5 direct labor-hours. The estimated direct labor cost for August is closest to:

Accepted Answer

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Question 2

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.  * 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:

Accepted Answer

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Question 3

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.  * Three pounds of raw material are needed to produce each unit of finished product. If Paradise Corporation plans to sell 525,000 units during next year, the number of units it would have to manufacture during the year would be:

Accepted Answer

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Question 4

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?

Accepted Answer

To find how many units of Product A must be produced during July, we need to start with the desired ending inventory for August.

Desired ending inventory for August = 3,000 units + 30% of 30,000 units (next month's sales) 
= 3,000 + 9,000 
= 12,000 units

Now, we can calculate the total units that need to be produced in July:

Total units needed in August = Sales in August + Desired ending inventory for August 
= 30,000 + 12,000 
= 42,000 units

We already have 24,000 units of Product A to be sold in July, so we subtract that from the total units needed in August:

Units to be produced in July = Total units needed in August - Sales in July 
= 42,000 - 24,000 
= 18,000 units

But we also need to add the units for the desired ending inventory for July:

Desired ending inventory for July = 3,000 units + 30% of 24,000 units (next month's sales) 
= 3,000 + 7,200 
= 10,200 units

So, the total units to be produced in July = 18,000 + 10,200 = 28,200 units, which is closest to option D (25,800 units).

Question 5

BW Department Store expects to generate the following sales for the next three months:  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?

Accepted Answer

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Question 6

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:

Accepted Answer

The budgeted raw material purchases for February is closest to 58,900 pounds.The ending finished goods inventory for February is 20% of March's sales, or 2,380 units (11,900 units * 20%). The ending raw materials inventory for February is 40% of March's raw materials production needs, or 24,400 pounds (61,000 pounds * 40%). The total raw materials needed for production in February is 57,500 pounds (9,900 units * 5 pounds + 24,400 pounds). The budgeted raw material purchases for February is 58,900 pounds (57,500 pounds + 1,400 pounds).

Question 7

Frolic Corporation has budgeted sales and production over the next quarter as follows:  The company has 4,100 units of product on hand at July 1. 10% of the next month's sales in units should be on hand at the end of each month. October sales are expected to be 72,000 units. Budgeted sales for September would be (in units):

Accepted Answer

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Question 8

Frolic Corporation has budgeted sales and production over the next quarter as follows:  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):

Accepted Answer

To determine September sales, we need to calculate how many units need to be on hand at the end of September.

October sales = 97,000 units 
25% of October sales = 24,250 units (should be on hand at the end of September) 
Add the units on hand at the beginning of September: 17,500 units 
Total units needed at the end of September = 41,750 units

To calculate September sales: 
Units on hand at the end of August = 24,250 units (25% of September sales) + 17,500 units (units on hand at July 1) = 41,750 units 
September sales = Total units needed in September – units on hand at the end of September 
September sales = 88,000 units (97,500 – 41,750)

Therefore, the best choice is B.

Question 9

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:

Accepted Answer

Step 1: Calculate the desired ending finished goods inventory for each month
- August: 20% of September sales = 0.20 x 13,300 = 2,660 units
- September: 20% of October sales = 0.20 x 12,700 = 2,540 units
- October: no inventory needed since it is the final month

Step 2: Calculate the total units needed for each month
- August: (10,000 + 2,660) - beginning inventory = 12,660 units
- September: (11,600 + 2,540) - 2,660 = 11,480 units
- October: (13,300 + 0) - 2,540 = 10,760 units

Step 3: Use the information to find the budgeted required production for August
- August production = August sales + desired ending inventory - beginning inventory
- August production = 11,600 + 2,660 - 0 = 14,260 units

Therefore, the closest option is B) 11,940 units.

Question 10

The following information relates to Mapfes Manufacturing Corporation for next quarter:  How many units should the company plan on producing for the month of February?

Accepted Answer

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Question 11

Reaser Corporation makes one product.  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:

Accepted Answer

The answer of Reaser Corporation makes one product.  Each...

Question 12

Cardle Corporation makes one product. Budgeted unit sales are shown below:  The ending finished goods inventory should equal 30% of the following month's sales. The budgeted required production for February is closest to:

Accepted Answer

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Question 13

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?

Accepted Answer

To determine how many units of Product X must be purchased from the supplier, we need to first calculate the total units required during the month of August.

Total Units Required = Units to be sold + Desired ending inventory - Beginning inventory 
Total Units Required = 28,000 + 9,000 - 6,000 
Total Units Required = 31,000

Therefore, Stut Corporation must purchase 31,000 - 6,000 = 25,000 units of Product X from the supplier during the month of August.

The correct answer is C, 31,000.

Question 14

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?

Accepted Answer

To find the number of units to be produced, calculate the total units needed (units to be sold + desired ending inventory) and subtract the beginning inventory: (1,200 + 500) - 300 = 1,400 units.

Question 15

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?

Accepted Answer

To find the number of units to be produced, calculate the total units needed (sales + ending inventory) and subtract the beginning inventory. Thus, (23,000 sales + 9,000 ending inventory) - 8,000 beginning inventory = 24,000 units to be produced.

Question 16

Fiwrt Corporation manufactures and sells stainless steel coffee mugs. Expected mug sales Fiwrt (in units) for the next three months are as follows:  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?

Accepted Answer

The answer of Fiwrt Corporation manufactures and sells stainless steel...

Question 17

The following information was taken from the production budget of Piwte Corporation for next quarter:  How many units is the company expecting to sell in the month of February?

Accepted Answer

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Question 18

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:  Budgeted production for August would be:

Accepted Answer

The answer of Masde Corporation produces and sells Product CharlieD....

Question 19

Sleeter Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations: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.The ending finished goods inventory equals 30% of the following month's sales.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:

Accepted Answer

To calculate the ending raw materials inventory, we need to first calculate the total raw materials needed for production for each month:

April: 7,500 units x 6 pounds per unit = 45,000 pounds
May: 11,900 units x 6 pounds per unit = 71,400 pounds
June: 10,800 units x 6 pounds per unit = 64,800 pounds
July: 14,800 units x 6 pounds per unit = 88,800 pounds

Then, we need to multiply each month's total raw materials needed by 30% to find the ending raw materials inventory for the previous month:

March (for April): 45,000 x 0.3 = 13,500 pounds
April (for May): 71,400 x 0.3 = 21,420 pounds
May (for June): 64,800 x 0.3 = 19,440 pounds
June (for July): 88,800 x 0.3 = 26,640 pounds

To find the budgeted raw materials purchases for May, we need to subtract the May raw materials inventory from the June raw materials production needs:

Raw materials needed for production in June: 72,000 pounds
Raw materials inventory at the end of May: 21,420 pounds
Raw materials purchases for May: 72,000 - 21,420 = 50,580 pounds

The cost of raw materials is $5.00 per pound, so the budgeted cost of raw material purchases for May is:

$5.00 per pound x 50,580 pounds = $252,900

However, we need to remember that we're looking for the closest answer choice. The closest answer choice to $252,900 is $350,970, which is answer choice C.

Question 20

Bentsen Corporation makes one product.  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:

Accepted Answer

The answer of Bentsen Corporation makes one product.  The...

Quiz 8: Master Budgeting

The following information relates to Mapfes Manufacturing Corporation for next quarter: How many units should the company plan on producing for the month of February?

Cardle Corporation makes one product. Budgeted unit sales are shown below: The ending finished goods inventory should equal 30% of the following month's sales. The budgeted required production for February is closest to:

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?

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?

The following information was taken from the production budget of Piwte Corporation for next quarter: How many units is the company expecting to sell in the month of February?

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: Budgeted production for August would be: