Rogers Corporation is preparing its cash budget for July. The budgeted beginning cash balance is $25,000. Budgeted cash receipts total $141,000 and budgeted cash disbursements total $139,000. The desired ending cash balance is $30,000.

Rogers Corporation is preparing its cash budget for July. The budgeted beginning cash balance is $25,000. Budgeted cash receipts total $141,000 and budgeted cash disbursements total $139,000. The desired ending cash balance is $30,000.

The excess (deficiency) of cash available over disbursements for July is:
A) $23,000
B) $2,000
C) $166,000
D) $27,000
2.
Information on the actual sales and inventory purchases of the Law Company for the first quarter follow:

Collections from Law Company s customers are normally 60% in the month of sale, 30% in the month following sale, and 8% in the second month following sale. The balance is uncollectible. Law Company takes full advantage of the 3% discount allowed on purchases paid for by the end of the following month.
The company expects sales in April of $150,000 and inventory purchases of $100,000. Selling and administrative expenses for the month of April are expected to be $38,000, of which $15,000 is salaries and $8,000 is depreciation. The remaining selling and administrative expenses are variable with respect to the amount of sales in dollars. Those selling and administrative expenses requiring a cash outlay are paid for during the month incurred. Law Company s cash balance on March 1 was $43,000, and on April 1 was $35,000.

The expected cash disbursements during April for selling and administrative expenses would be:
A) $38,000
B) $30,000
C) $23,000
D) $15,000
3.

Traverse Company manufactures and sells women s skirts. Each skirt (unit) requires 2.5 yards of cloth. Selected data from Traverse s master budget for next quarter are shown below:

Each unit requires 1.5 hours of direct labor, and the average hourly cost of Traverse s direct labor is $10. What is the cost of Traverse Company s direct labor in September?
A) $135,000
B) $180,000
C) $157,500
D) $120,000
4.
Francis Manufacturing Company is currently preparing its cash budget for next month and has gathered the following information:

The beginning cash balance will be $6,000 and the company requires a minimum cash balance at the end of the month of $5,000. How much will Francis Manufacturing need to borrow to meet its cash needs for the month?
A) $9,100
B) $14,100
C) $20,100
D) None of the above.
5.

On January 1, Barnes Company has 8,000 units of Product A on hand. During the year, the company plans to sell 30,000 units of Product A, and plans to have 6,500 units on hand at year end. How many units of Product A must be produced during the year?
A) 28,500
B) 31,500
C) 30,000
D) 36,500
6.
Cartier Inc. bases its manufacturing overhead budget on budgeted direct labor hours. The variable overhead rate is $5.80 per direct labor hour. The company s budgeted fixed manufacturing overhead is $39,930 per month, which includes depreciation of $12,870. All other fixed manufacturing overhead costs represent current cash flows. The direct labor budget indicates that 3,300 direct labor hours will be required in April.

The April cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
A) $59,070
B) $46,200
C) $27,060
D) $19,140
7.

When preparing a direct materials budget, the required purchases of raw materials in units equals:
A) raw materials needed to meet the production schedule + desired ending inventory of raw materials beginning inventory of raw materials.
B) raw materials needed to meet the production schedule desired ending inventory of raw materials beginning inventory of raw materials.
C) raw materials needed to meet the production schedule desired ending inventory of raw materials + beginning inventory of raw materials.
D) raw materials needed to meet the production schedule + desired ending inventory of raw materials + beginning inventory of raw materials.
8.
(ch09profitplanning 028) All of Gaylord Company
All of Gaylord Company s sales are on account. Thirty five percent of the credit sales are collected in the month of sale, 45% in the month following sale, and the rest are collected in the second month following sale. Bad debts are negligible and should be ignored. The following are budgeted sales data for the company:

What is the amount of cash that should be collected in March?
A) $39,000
B) $37,000
C) $27,500
D) $51,000
9.
(ch09profitplanning 043) The manufacturing overhead budget at Fr
The manufacturing overhead budget at Franklyn Corporation is based on budgeted direct labor hours. The direct labor budget indicates that 4,400 direct labor hours will be required in January. The variable overhead rate is $1.30 per direct labor hour. The company s budgeted fixed manufacturing overhead is $60,280 per month, which includes depreciation of $17,160. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
A) $5,720
B) $43,120
C) $48,840
D) $66,000
10.
(ch09profitplanning 104) To attain its desired ending cash balan
Bries Corporation is preparing its cash budget for January. The budgeted beginning cash balance is $18,000. Budgeted cash receipts total $183,000 and budgeted cash disbursements total $188,000. The desired ending cash balance is $30,000.

To attain its desired ending cash balance for January, the company should borrow:
A) $17,000
B) $0
C) $30,000
D) $43,000
11.

The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor hours. The direct labor budget indicates that 5,800 direct labor hours will be required in May. The variable overhead rate is $9.10 per direct labor hour. The company s budgeted fixed manufacturing overhead is $104,400 per month, which includes depreciation of $8,120. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for May should be:
A) $9.10
B) $27.10
C) $18.00
D) $25.70
12.
Rogers Corporation is preparing its cash budget for July. The budgeted beginning cash balance is $25,000. Budgeted cash receipts total $141,000 and budgeted cash disbursements total $139,000. The desired ending cash balance is $30,000.

To attain its desired ending cash balance for July, the company should borrow:
A) $30,000
B) $0
C) $3,000
D) $57,000
13.
Harden, Inc., has budgeted sales in units for the next five months as follows:

Past experience has shown that the ending inventory for each month should be equal to 15% of the next month s sales in units. The inventory on May 31 contained 1,050 units. The company needs to prepare a production budget for the next five months.

The total number of units produced in July should be:
A) 5,300 units
B) 6,365 units
C) 5,570 units
D) 5,030 units
14.
Varughese Inc. is working on its cash budget for March. The budgeted beginning cash balance is $33,000. Budgeted cash receipts total $182,000 and budgeted cash disbursements total $191,000. The desired ending cash balance is $40,000.

To attain its desired ending cash balance for March, the company needs to borrow:
A) $40,000
B) $0
C) $16,000
D) $64,000
15.
On October 1, The Gala Manufacturing Company 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?
A) 1,400
B) 1,500
C) 1,000
D) 2,000
16.
The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor hours. The direct labor budget indicates that 1,600 direct labor hours will be required in February. The variable overhead rate is $3.40 per direct labor hour. The company s budgeted fixed manufacturing overhead is $28,320 per month, which includes depreciation of $3,680. All other fixed manufacturing overhead costs represent current cash flows.

The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for February should be:
A) $3.40
B) $21.10
C) $17.70
D) $18.80
17.
Which of the following statements is NOT correct concerning the Manufacturing Overhead Budget?
A) The Manufacturing Overhead Budget provides a schedule of all costs of production other than direct materials and labor costs.
B) The Manufacturing Overhead Budget shows only the variable portion of manufacturing overhead.
C) The Manufacturing Overhead Budget shows the expected cash disbursements for manufacturing overhead.
D) The Manufacturing Overhead Budget is prepared after the Sales Budget.
18.
When preparing a merchandise purchases budget, the required purchases in units equals:
A) budgeted unit sales + beginning merchandise inventory + desired merchandise ending inventory.
B) budgeted unit sales beginning merchandise inventory + desired merchandise ending inventory.
C) budgeted unit sales beginning merchandise inventory desired merchandise ending inventory.
D) budgeted unit sales + beginning merchandise inventory desired merchandise ending inventory.
19.

Information on the actual sales and inventory purchases of the Law Company for the first quarter follow:

Collections from Law Company s customers are normally 60% in the month of sale, 30% in the month following sale, and 8% in the second month following sale. The balance is uncollectible. Law Company takes full advantage of the 3% discount allowed on purchases paid for by the end of the following month.
The company expects sales in April of $150,000 and inventory purchases of $100,000. Selling and administrative expenses for the month of April are expected to be $38,000, of which $15,000 is salaries and $8,000 is depreciation. The remaining selling and administrative expenses are variable with respect to the amount of sales in dollars. Those selling and administrative expenses requiring a cash outlay are paid for during the month incurred. Law Company s cash balance on March 1 was $43,000, and on April 1 was $35,000.

The expected cash disbursements during April for inventory purchases would be:
A) $100,000
B) $97,000
C) $90,000
D) $87,300
20.

Arciba Inc. bases its manufacturing overhead budget on budgeted direct labor hours. The direct labor budget indicates that 7,400 direct labor hours will be required in January. The variable overhead rate is $9.50 per direct labor hour. The company s budgeted fixed manufacturing overhead is $130,980 per month, which includes depreciation of $10,360. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for January should be:
A) $27.20
B) $25.80
C) $17.70
D) $9.50

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