Quiz 6 - Chapter 8

Quiz 6 - Chapter 8 Fall 2021 _____1) Which of the following statements is NOT correct concerning the Cash Budget? A) The Cash Budget builds on earlier budgets and schedules as well as additional data. B) The Cash Budget should be prepared before the Budgeted Balance Sheet. C) The Cash Budget should be prepared before the Budgeted Income Statement. D) It is not necessary to prepare any other budgets before preparing the Cash Budget. _____2) The following information was taken from the production budget of Piwte Corporation for next quarter: January Units to be produced Desired ending inventory of finished goods 128,000 30,000 February 140,000 36,000 March 152,000 38,000 How many units is the company expecting to sell in the month of February? A) 134,000 B) 132,000 C) 138,000 D) 135,000 _____3) Parwin Corporation plans to sell 30,000 units during August. If the company has 11,500 units on hand at the start of the month, and plans to have 12,500 units on hand at the end of the month, how many units must be produced during the month? A) B) C) D) Version 1 29,000 42,500 31,000 41,500 1 Quiz 6 - Chapter 8 Fall 2021 _____4) 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. Raw material* Finished goods Beginning Inventory 30,000 70,000 Ending Inventory 40,000 60,000 * 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: A) B) C) D) 510,000 units 570,000 units 500,000 units 520,000 units _____5) There are various budgets within the master budget. One of these budgets is the production budget. Which of the following BEST describes the production budget? A) B) C) D) It details the required raw materials purchases. It is calculated based on the sales budget and the desired ending inventory. It details the required direct labor hours. It summarizes the costs of producing units for the budget period. _____6) 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. Version 1 2 Quiz 6 - Chapter 8 Fall 2021 _____7) Which of the following statements is NOT correct concerning the Manufacturing Overhead Budget? A) The Manufacturing Overhead Budget shows only the variable portion of manufacturing overhead. B) The Manufacturing Overhead Budget shows the expected cash disbursements for manufacturing overhead. C) The Manufacturing Overhead Budget provides a schedule of all costs of production other than direct materials and labor costs. D) The Manufacturing Overhead Budget is prepared after the Sales Budget. _____8) All of Gaylord Corporation's sales are on account. Thirty-five percent of the sales on account are collected in the month of sale, 45% in the month following sale, and the remainder are collected in the second month following sale. The following are budgeted sales data for the company: Total sales January $50,000 February $60,000 March $40,000 April $30,000 What is the amount of cash that should be collected in March?] A) B) C) D) 9) $37,000 $41,000 $24,000 $51,000 The following information relates to Mapfes Manufacturing Corporation for next quarter: January Expected sales (in units) Desired ending finished goods inventory (in units) 440,000 39,000 February 390,000 38,000 March 380,000 40,000 How many units should the company plan on producing for the month of February? A) B) C) D) Version 1 391,000 units 390,000 units 428,000 units 389,000 units 3 Quiz 6 - Chapter 8 Fall 2021 _____10) Frolic Corporation has budgeted sales and production over the next quarter as follows: Sales in units Production in units July 70,000 73,250 August 83,000 84,750 September ? 91,750 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): A) B) C) D) Version 1 88,000 86,000 90,000 84,000 4