a. Hennessey Company manufactures card tables. The company has a policy of maint

Question

a. Hennessey Company manufactures card tables. The company has a policy of maintaining a finished goods inventory equal to 40 percent of the next month's planned sales. Each card table requires 3 hours of labor. The budgeted labor rate for the coming year is $13 per hour. Planned sales for the months of April, May, and June are respectively 4,000; 5,000; and 3,000 units. What is Hennessey Company’s budgeted direct labor cost for May?

$54,600

$163,800

$226,200

$179,400

b.

For the month of November, Whetzel Corporation. predicts total cash collections to be $1 million. Also for November, Whetzel Corporation. estimates that its beginning cash balance will be $50,000 and that it will borrow cash in the amount of $70,000. If Whetzel Corporation. estimates an ending cash balance of $30,000 for November, what must its projected cash disbursements be?

$1,090,000

$1,120,000

$1,070,000

$1,020,000

$54,600

$163,800

$226,200

$179,400

Explanation / Answer

A)

Answer is B. $163,800

B)

Answer is A. $1,090,000

Budgeted sales for may         5,000 Add: ending inventory (3,000*40%)         1,200 Less: Beginning inventory (5,000*40%)       (2,000) Budgeted production         4,200 Labour hour required per unit 3 hours Total labour hour required (4,200*3)       12,600 Hourly rate $13 Total labour cost for may ($13*12,600) $163,800

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