1. Sandler Company has 6,000 units in beginning finished goods. The sales budget
ID: 2428181 • Letter: 1
Question
1. Sandler Company has 6,000 units in beginning finished goods. The sales budget shows expected sales to be 24,000 units. If the production budget shows that 28,000 units are required for production, what was the desired ending finished goods?A) 2,000.
B) 6,000.
C) 10,000.
D) 18,000.
2. The following credit sales are budgeted by Peckman Company:January $136,000
February 200,000
March 280,000
April 240,000
The company's past experience indicates that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and 8% in the second month following the sale. The anticipated cash inflow for the month of April is
A) $246,880.
B) $224,000.
C) $240,000.
D) $235,200.
3. Lester Production is planning to sell 600 boxes of ceramic tile, with production estimated at 580 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Lester has 2,600 pounds of clay mix in beginning inventory and wants to have 3,000 pounds in ending inventory.
What is the total amount to be budgeted in pounds for direct materials to be purchased for the month?
A) 25,520
B) 25,120
C) 25,920
D) 26,800
4. The following information is taken from the production budget for the first quarter:Beginning inventory in units 1,200
Sales budgeted for the quarter 456,000
Capacity in units of production facility 472,000
How many finished goods units should be produced during the quarter if the company desires 3,200 units available to start the next quarter?
A) 458,000
B) 454,000
C) 474,000
D) 459,200
Explanation / Answer
1) Beg Finished Goods + Demand - Production = Ending Finished Goods 6000 + 24000 - 28000 = 2000 (A) 2. January $136,000 February 200,000 March 280,000 April 240,000 April's Cash Inflow consists only of February, March, and April since January is completely paid in March. So we have: February (8%) = .08 * 200,000 = 16,000 March (20%) = .2*280,000 = 56,000 April (70%) = .7 = 168,000 Sum those up and you get $240,000 (C) 3. 580 boxes produced during May - Each box requires 44 pounds. Therefore, that is 580*44 = 25,520 pounds produced. Lester has 2,600 pounds of clay mix in beginning inventory and wants to have 3,000 pounds in ending inventory. 600 boxes are planning to be sold, which is: 26,400 pounds Ending Inventory = Beginning inventory + Purchases during the period - Cost of goods sold Purchases during the period = Ending Inventory - Beginning Inventory + Cost of goods sold = 3000 - 2600 + 26,400 = 26,800 (D) 4. The following information is taken from the production budget for the first Beginning inventory in units 1,200 Sales budgeted for the quarter 456,000 Capacity in units of production facility 472,000 Beg FG Inventory + Cost of goods manufactured - COGS = Ending FG Inventory Cost of goods manufactured = Ending Inventory - Beg Inventory + COGS = 3,200 - 1,200 + 456,000 = 458,000 (A)
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