week 6

1.Direct materials inventories are kept in pounds in Crane Company, and the total pounds of direct materials needed for production is 9800. If the beginning inventory is 1100 pounds and the desired ending inventory is 2500 pounds, the total pounds to be purchased are

11200.

10100.

9800.

9900.

2.Sheffield Corp. required production for June is 162000 units. To make one unit of finished product, three pounds of direct material Z are required. Actual beginning and desired ending inventories of direct material Z are 340000 and 380000 pounds, respectively. How many pounds of direct material Z must be purchased?

502000.

486000.

526000.

462000.

3.Sheridan Company determines that 64000 pounds of direct materials are needed for production in July. There are 4200 pounds of direct materials on hand at July 1 and the desired ending inventory is 3700 pounds. If the cost per unit of direct materials is $ 3, what is the budgeted total cost of direct materials purchases?

$ 196500.

$ 190500.

$ 187500.

$ 193500.

4.Bonita Industries is preparing its direct labor budget for May. Projections for the month are that 36400 units are to be produced and that direct labor time is three hours per unit. If the labor cost per hour is $12, what is the total budgeted direct labor cost for May?

$1296000.

$1288800.

$1267200.

$1310400.

5.A company determined that the budgeted cost of producing a product is $30 per unit. On June 1, there were 76000 units on hand, the sales department budgeted sales of 250000 units in June, and the company desires to have 70000 units on hand on June 30. The budgeted cost of goods sold for June would be

$7680000.

$9780000.

$7320000.

$7500000.

6.Concord Corporation expects to purchase $80000 of materials in July and $120000 of materials in August. Three-fourths of all purchases are paid for in the month of purchase, and the other one-fourth are paid for in the month following the month of purchase. How much will August's cash disbursements for materials purchases be?

$60000

$90000

$110000

$120000

7.On January 1, Sunland Company has a beginning cash balance of $186000. During the year, the company expects cash disbursements of $980000 and cash receipts of $780000. If Sunland requires an ending cash balance of $140000, Sunland Company must borrow

$154000.

$386000.

$126000.

$140000.

8.Waterway Industries has 24000 units in beginning finished goods. If sales are expected to be 130000 units for the year and Waterway desires ending finished goods of 30000 units, how many units must the company produce?

124000

136000

160000

130000

9.Sunland Company's direct materials budget shows total cost of direct materials purchases for January $ 250000, February $ 270000 and March $ 330000. Cash payments are 60% in the month of purchase and 40% in the following month. The budgeted cash payments for March are

$ 294000.

$ 270000.

$ 306000.

$ 240000.

10.The production budget shows expected unit sales of 22000. Beginning finished goods units are 3200. Required production units are 23600. What are the desired ending finished goods units?

5600

3200

4800

1600

11.The production budget shows that expected unit sales are 39000. The total required units are 45000. What are the required production units?

6000

12000

Cannot be determined from the data provided

9000

12.A company budgeted unit sales of 124000 units for January, 2020 and 140000 units for February 2020. The company has a policy of having an inventory of units on hand at the end of each month equal to 30% of next month's budgeted unit sales. If there were 37200 units of inventory on hand on December 31, 2019, how many units should be produced in January, 2020 in order for the company to meet its goals?

128800 units

166000 units

119200 units

124000 units

13.At January 1, 2019, Marigold Corp. has beginning inventory of 2000 surfboards. Marigold estimates it will sell 9000 units during the first quarter of 2019 with a 12% increase in sales each quarter. Marigold’s policy is to maintain an ending inventory equal to 25% of the next quarter’s sales. Each surfboard costs $100 and is sold for $150. How much is budgeted sales revenue for the third quarter of 2019?

$1693440

1762500

$11289.60

$412500

14.Crane Company is planning to sell 500 boxes of ceramic tile, with production estimated at 570 boxes during May. Each box of tile requires 44 pounds of clay mix and a 0.50 hour of direct labor. Clay mix costs $ 0.40 per pound and employees of the company are paid $ 14 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Crane has 3200 pounds of clay mix in beginning inventory and wants to have 5200 pounds in ending inventory. What is the total amount to be budgeted for manufacturing overhead for the month?

$ 17556

$ 4389

$ 3850

$ 15400

15.Bonita Industries plans to sell 340 potted plants during April and 220 units in May. Bonita Industries keeps 15% of the next month’s sales as ending inventory. How many units should Bonita Industries produce during April?

340

322

358

373

16.Sunland Manufacturing uses a flexible budget. It has the following budgeted manufacturing costs for 24300 pairs of shoes: Fixed Manufacturing Costs, $12200 and Variable Manufacturing Costs, $14.00 per pair of shoes. If Sunland Manufacturing makes 19400 pairs of shoes this month, what are the total budgeted manufacturing cost for the month?

$271600.

$283800.

$340200.

$352400.

17.Concord Corporationhad average operating assets of $4600000 and sales of $2300000 in 2016. If the controllable margin was $920000, the ROI was

20%

80%

40%

50%

18.Sheffield Corp. is evaluating its Piquette division, an investment center. The division has a $60000 controllable margin and $420000 of sales. How much will Sheffield’s average operating assets be when its return on investment is 10%?

$600000

$660000

$420000

$360000

19.If an investment center has generated a controllable margin of $70000 and sales of $800000, what is the return on investment for the investment center if average operating assets were $500000 during the period?

9%

160%

14%

146%

20.Concord Corporation had sales of $620000, variable costs of $265000, and direct fixed costs totaling $100000. The company’s operating assets total $920000, and its required return is 10%. How much is the residual income?

$173000

$92000

$528000

$163000

21.Bramble Corp. uses flexible budgets. At normal capacity of 12000 units, budgeted manufacturing overhead is $ 96000 variable and $ 360000 fixed. If Bramble had actual overhead costs of $ 469000 for 15000 units produced, what is the difference between actual and budgeted costs?

$ 11000 unfavorable

$ 24000 favorable

$ 13000 favorable

$ 11000 favorable

22.A department has budgeted monthly manufacturing overhead cost of $480000 plus $3 per direct labor hour. If a flexible budget report reflects $984000 for total budgeted manufacturing cost for the month, the actual level of activity achieved during the month was

168000 direct labor hours.

328000 direct labor hours.

488000 direct labor hours.

cannot be determined from the information provided.

23.For June, Bramble Corp. estimated sales revenue at $500000. It pays sales commissions that are 4% of sales. The sales manager’s salary is $235000, estimated shipping expenses total 1% of sales, and miscellaneous selling expenses are $10000. How much are budgeted selling expenses for the month of July if sales are expected to be $440000?

$267000

$22000

$270000

$32000

24.Marigold Corp. uses flexible budgets. At normal capacity of 7000 units, budgeted manufacturing overhead is: $21000 variable and $270000 fixed. If Stone had actual overhead costs of $295200 for 9000 units produced, what is the difference between actual and budgeted costs?

$5400 unfavorable

$1800 favorable

$1800 unfavorable

$7200 favorable

25.At 7000 direct labor hours, the flexible budget for indirect materials is $14000. If $15400 are incurred at 7400 direct labor hours, the flexible budget report should show the following difference for indirect materials:

$600 unfavorable.

$600 favorable.

$1400 unfavorable.

$1400 favorable.

26.Concord Company had the following operating data for the year for its computer division: sales, $659000; contribution margin, $147000; total fixed costs (controllable), $95000; and average total operating assets, $272000. What is the controllable margin for the year?

$52000.

$147000.

54%.

14%.

27.If an investment center has a $108000 controllable margin and $1400000 of sales, what average operating assets are needed to have a return on investment of 10%?

$248000

$1080000

$1400000

$140000

28.Sunland Company prepared a 2019 budget for 75000 units of product. Actual production in 2019 was 100000 units. To be most useful, what amounts should a performance report for this company compare?

The actual results for 100000 units with last year’s actual results for 102500 units.

The actual results for 100000 units with the original budget for 75000 units.

The actual results for 100000 units with a new budget for 100000 units.

It doesn’t matter. All of these choices are equally useful.

29.If a company plans to sell 50000 units of product but sells 60000, the most appropriate comparison of the cost data associated with the sales will be by a budget based on

55000 units of activity.

50000 units of activity.

the original planned level of activity.

60000 units of activity.