Q1: The Cardinal Company had a finished goods inventory of 55,000 units on Janua
ID: 2400095 • Letter: Q
Question
Q1:
The Cardinal Company had a finished goods inventory of 55,000 units on January 1. Its projected sales for the next four months were: January - 200,000 units; February - 180,000 units; March - 210,000 units; and April - 230,000 units. The Cardinal Company wishes to maintain a desired ending finished goods inventory of 20% of the following month’s sales.
What is the budgeted units of production for January?
a.200,000
b.181,000
c.219,000
d.236,000
Q2:
The Cardinal Company had a finished goods inventory of 55,000 units on January 1. Its projected sales for the next four months were: January - 200,000 units; February - 180,000 units; March - 210,000 units; and April - 230,000 units. The Cardinal Company wishes to maintain a desired ending finished goods inventory of 20% of the following month's sales.
What is the budgeted units of production for February?
a.174,000
b.222,000
c.186,000
d.181,000
Q3:
Woodpecker Co. has $295,000 in accounts receivable on January 1. Budgeted sales for January are $930,000. Woodpecker Co. expects to sell 20% of its merchandise for cash. Of the remaining 80% of sales on account, 75% are expected to be collected in the month of sale and the remainder the following month. The January cash collections from sales are
$831,200
$1,334,000
$1,039,000
$623,400
Q4:
Consider Derek's budget information: materials to be used totals $65,800; direct labor totals $200,100; factory overhead totals $395,000; work in process inventory January 1, $186,900; and work in progress inventory on December 31, $196,600. What is the budgeted cost of goods manufactured for the year?
$847,800
$196,600
$660,900
$651,200
Q5:
For February, sales revenue is $604,000; sales commissions are 4% of sales; the sales manager's salary is $94,900; advertising expenses are $93,500; shipping expenses total 2% of sales; and miscellaneous selling expenses are $2,500 plus 1/2 of 1% of sales. Total selling expenses for the month of February are
$227,140
$230,160
$190,900
$215,060
Explanation / Answer
Q1 - The answer is 181,000 units.
Calculation of budgeted units of Production in January:
Sales = Opening stock + purchases or Production - Closing stock
From the above formula we can derive, Production (in units) = Sales - Opening stock + Closing stock
= 200,000 - 55,000 + 36,000
= 181,000 units.
Note - Closing stock for the month January = 20% of estimated sales in February = 180,000 X 20% = 36,000 units
Q2 - The answer is 186,000 units
Calculation of budgeted units of Production in February:
Sales = Opening stock + purchases or Production - Closing stock
From the above formula we can derive, Production (in units) = Sales - Opening stock + Closing stock
= 180,000 - 36,000 + 42,000
= 186,000 units
Note 1 - Closing stock for the month of January will become Opening stock for the month of February.
Note 2 - Closing stock for the month February= 20% of estimated sales in March = 210,000 X 20% = 42,000 units
Q3 The answer is $1,039,000.
Calculation January cash collection
Opening Accounts Receivables (i.e on Jan 1) = $295,000
Budgeted total Sales in January (On cash + On account) = $930,000
Expected cash sales = 20% of total budgeted sales = $930,000 X 20% = $186,000 ------------> A
Sales on account = 80% of total budgeted sales = $930,000 X 80% = $744,000
Cash collection relating to sales in January = 75% of credit sales = $744,000 X 75% = $558,000 --------------> B
Cash collection relating to accounts receivable on Jan 1 = $295,000 --------------> C
Total cash Collection in the month of January = A + B C = $1,039,000 ,
Q4 The answer is $651,200.
Budgeted cost of goods manufactured = Direct material + Labour cost + Factory OH + Opening WIP - Closing WIP
A. Budgeted direct material = $65,800
B. Budgeted direct Labour = $200,100
C. Budgeted factory overhead (OH) = $395,000
D. Opening Work in progress (WIP) = $186,900
E. Closing Work in progress (WIP) = $196,600
Therefore budgeted cost of goods manufactured = $65,800 + $200,100 + $395,000 + $186,900 - $196,600
= $651,200
Q5 The answer is $230,160.
Calculation of total selling expenses:
A. Sales Commisssion = 4% of sales = $604,000 X 4% = $24,160
B. Sales manager salary = $94,900
C. Advertising expenses = $93,500
D. Shipping expenses = 2% of sales = $604,000 X 2% = $12,080
E. Misc selling expenses = $2500 + (1% of sales)/2 = $2500 + ($604,000 X 1%)/2 = $2500 + $3020 = $5,520
Total selling expenses = A + B + C + D + E = $230,160
Hope this is useful and thank you!!!!!!
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