ACCT 1340 FINAL 8-10, 12-13

 

Student: ___________________________________________________________________________

 

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

Fab likes to maintain a finished goods inventory equal to 30% of the next month’s estimated sales. How many mugs should Fab plan on producing during the month of November?

A. 23,200 mugs
B. 26,800 mugs
C. 25,900 mugs
D. 34,300 mugs

 

 

 

 

2. The following are budgeted data:

One pound of material is required for each finished unit. The inventory of materials at the end of each month should equal 20% of the following month’s production needs. Purchases of raw materials for February would be budgeted to be:

A. 19,000 pounds
B. 19,200 pounds
C. 23,000 pounds
D. 18,800 pounds

 

 

 

 

  Richards Corporation has the following budgeted sales for the first half of next year:

The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled:

The accounts receivable balance on January 1 is $70,000. Of this amount, $60,000 represents uncollected December sales and $10,000 represents uncollected November sales.

 

 

 

3. What is the budgeted accounts receivable balance on May 30?

A. $81,000  
B. $68,000  
C. $60,000  
D. $141,000

 

 

 

 

  Bracken Corporation is a small wholesaler of gourmet food products. Data regarding the store’s operations follow:

· Sales are budgeted at $330,000 for November, $340,000 for December, and $340,000 for January.
· Collections are expected to be 80% in the month of sale, 17% in the month following the sale, and 3% uncollectible.
· The cost of goods sold is 75% of sales.
· 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.
· Other monthly expenses to be paid in cash are $21,800.
· Monthly depreciation is $19,000.
· Ignore taxes.

 

 

 

4. December cash disbursements for merchandise purchases would be:

A. $178,500
B. $225,000
C. $255,000
D. $252,750

 

 

 

 

  Noel Enterprises has budgeted sales in units for the next five months as follows:

Past experience has shown that the ending inventory for each month must be equal to 10% of the next month’s sales in units. The inventory on May 31 contained 400 units. The company needs to prepare a production budget for the second quarter of the year.