1) Parker Corp., which operates on a calendar year, expects to sell 4,000 units

Question

1) Parker Corp., which operates on a calendar year, expects to sell 4,000 units in October, and expects sales to increase 25% each month thereafter. Sales price is expected to stay constant at $13 per unit. What are budgeted revenues for the fourth quarter?

$156,000.00

$195,000.00

$52,000.00

$198,250.00

2)

Lea Company produces hand tools. Budgeted sales for March are 10,900 units. Beginning finished goods inventory in March is budgeted to be 1,600 units, and ending finished goods inventory is budgeted to be 1,500 units. How many units will be produced in March?

10,800

14,000

10,900

11,000

3)

Meadow Company produces hand tools. A sales budget for the next four months is as follows: March 10,500 units, April 13,600, May 16,600 and June 21,000. Meadow Company’s ending finished goods inventory policy is 10% of the following month’s sales. What is budgeted ending finished goods inventory for May?

1,360

1,050

2,100

1,660

Explanation / Answer

Dear Student, only one question is allowed at a time. I am answering the first question

Fourth quarter consists of October, November and December

Sales of October in units = 4,000 units

Sales of November = Sales of October x ( 1 + Growth)

= 4,000 x 1.25

= 5,000 units

Sales of December = 5,000 x1.25

= 6,250 units

Total sales in units of 4th quarter

= 4,000 + 5,000 + 6,250

= 15,250 units

Sales in value

= Sales in units x Selling price per unit

= 15,250 x $13

= $198,250

So, option D is the correct option

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