Chap 009

Chapter 009, Profit Planning Key
9-1
26. Parlee Company's sales are 30% in cash and 70% on credit. Sixty % of the credit sales are
collected in the month of sale, 25% in the month following sale, and 12% in the second month
following sale. The remainder are uncollectible. The following are budgeted sales data:
Total cash receipts in April would be budgeted to be:

A. $38,900
B. $47,900
C. $27,230
D. $36,230
AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Measurement
Learning Objective: 2
Level: Medium
9-2
27. The PDQ Company makes collections on credit sales according to the following schedule:
25% in month of sale
70% in month following sale
4% in second month following sale
1% uncollectible
The following sales have been budgeted:
Cash collections in June would be:

A. $113,400
B. $110,000
C. $111,000
D. $115,500
AACSB: Analytic
Level: Medium
9-3
28. Tolla Company is estimating the following sales for the first six months of next year:
Sales at Tolla are normally collected as 70% in the month of sale, 25% in the month following
the sale, and the remaining 5% being uncollectible. Also, those customers paying in the month
of sale are given a 2% discount. Based on this information, how much cash should Tolla
expect to collect during the month of April?
A. $281,260
B. $361,260
C. $366,010
D. $393,760
AACSB: Analytic
Level: Hard
9-4
29. Orion Corporation is preparing a cash budget for the six months beginning January 1.
Shown below are the company's expected collection pattern and the budgeted sales for the
period.
Expected collection pattern:
65% collected in the month of sale
20% collected in the month after sale
10% collected in the second month after sale
4% collected in the third month after sale
1% uncollectible
Budgeted sales:
The estimated total cash collections during April from sales and accounts receivables would
be:
A. $155,900
B. $167,000
C. $171,666
D. $173,400
AACSB: Analytic
Level: Medium
Source: CMA, adapted
9-5
30. Pardee Company plans to sell 12,000 units during the month of August. If the company
has 2,500 units on hand at the start of the month, and plans to have 2,000 units on hand at the
end of the month, how many units must be produced during the month?
A. 11,500
B. 12,500
C. 12,000
D. 14,000
Units produced = Ending inventory + Units sold - Beginning inventory
= 2,000 + 12,000 - 2,500 = 11,500
AACSB: Analytic
Level: Easy
31. Modesto Company produces and sells Product AlphaB. To guard against stockouts, the
company requires that 20% of the next month's sales be on hand at the end of each month.
Budgeted sales of Product AlphaB over the next four months are:
Budgeted production for August would be:

A. 62,000 units
B. 70,000 units
C. 58,000 units
D. 50,000 units
= (20% x 50,000) + 60,000 - (20% x 60,000)
= 10,000 + 60,000 - 12,000 = 58,000
AACSB: Analytic
Level: Medium
9-6
32. Friden Company has budgeted sales and production over the next quarter as follows:
The company has 20,000 units of product on hand at April 1. A minimum of 20% of the next
month's sales needs in units must be on hand at the end of each month. July sales are expected
to be 140,000 units. Budgeted sales for June would be (in units):
A. 188,000
B. 160,000
C. 128,000
D. 184,000
Units produced in June = Ending inventory + Units sold - Beginning inventory
156,000 = (140,000 x 20%) + X - (X x 20%)
where X = June sales in units
156,000 = 28,000 + 0.8 X
X = 160,000
AACSB: Analytic
Level: Hard
9-7
33. Fab Manufacturing Corporation manufactures and sells stainless steel coffee mugs.
Expected mug sales at Fab (in units) for the next three months are as follows:
Fab likes to maintain a finished goods inventory equal to 30% of the next month's estimated
sales. How many mugs should Fab plan on producing during the month of November?
A. 23,200 mugs
B. 26,800 mugs
C. 25,900 mugs
D. 34,300 mugs
= (30% x 31,000) + 25,000 - (25,000 x 30%)
= 9,300 + 25,000 - 7,500 = 26,800
AACSB: Analytic
Level: Medium
9-8
34. Superior Industries' sales budget shows quarterly sales for the next year as follows:
Company policy is to have a finished goods inventory at the end of each quarter equal to 20%
of the next quarter's sales. Budgeted production for the second quarter should be:
A. 7,200 units
B. 8,000 units
C. 8,800 units
D. 8,400 units
= (12,000 x 20%) + 8,000 - (8,000 x 20%)
= 2,400 + 8,000 - 1,600 = 8,800
AACSB: Analytic
Level: Medium
9-9
35. The Waverly Company has budgeted sales for next year as follows:
The ending inventory of finished goods for each quarter should equal 25% of the next
quarter's budgeted sales in units. The finished goods inventory at the start of the year is 3,000
units. Scheduled production for the third quarter should be:
A. 17,500
B. 18,500
C. 22,000
D. 13,500
= (16,000 x 25%) + 18,000 - (18,000 x 25%)
= 4,000 + 18,000 - 4,500 = 17,500
AACSB: Analytic
Level: Medium
9-10
36. The Tobler Company has budgeted production for next year as follows:
Four pounds of raw materials are required for each unit produced. Raw materials on hand at
the start of the year total 4,000 pounds. The raw materials inventory at the end of each quarter
should equal 10% of the next quarter's production needs. Budgeted purchases of raw materials
in the third quarter would be:
A. 63,200 pounds
B. 62,400 pounds
C. 56,800 pounds
D. 50,400 pounds
Materials to be purchased = Ending inventory + Materials used - Beginning inventory =
(14,000 x 10%) + 16,000 - (16,000 x 10%) = 1,400 + 16,000 - 1,600
= 15,800 units
15,800 units x 4 pounds per unit = 63,200 pounds
AACSB: Analytic
Level: Medium
9-11
37. Marple Company's budgeted production in units and budgeted raw materials purchases
over the next three months are given below:
Two pounds of raw materials are required to produce one unit of product. The company wants
raw materials on hand at the end of each month equal to 30% of the following month's
production needs. The company is expected to have 36,000 pounds of raw materials on hand
on January 1. Budgeted production for February should be:
A. 105,000 units
B. 82,500 units
C. 150,000 units
D. 75,000 units
Budgeted raw material purchases for February (in pounds) = [30% x (100,000 x 2 lbs)] +
(February production x 2 lbs) - [30% x (February production x 2 lbs)
165,000 = 60,000 + (1.4 x February production)
February production = 75,000 units
AACSB: Analytic
Level: Hard
9-12
38. Yumm Dairy Corporation manufactures carrot-flavored ice cream. Yumm's production
budget indicated the following units to be produced for the upcoming months:
Four (4) ounces of carrots are needed for each gallon of ice cream. Yumm also likes to have
enough carrots on hand to cover 5% of the next month's production needs for carrots. How
many ounces of carrots should Yumm plan on purchasing during the month of February?
A. 474,000 ounces
B. 486,000 ounces
C. 490,000 ounces
D. 510,000 ounces
Carrots purchased (ounces) = Ending inventory + Carrots used - Beginning inventory = [5% x
(150,000 x 4)] + (120,000 x 4) - [5% x (120,000 x 4)]
= 30,000 + 480,000 - 24,000 = 486,000 ounces
AACSB: Analytic
Level: Hard
9-13
39. Brummitt Corporation is working on its direct labor budget for the next two months. Each
unit of output requires 0.05 direct labor-hours. The direct labor rate is $7.50 per direct laborhour. The production budget calls for producing 9,100 units in May and 8,800 units in June. If
the direct labor work force is fully adjusted to the total direct labor-hours needed each month,
what would be the total combined direct labor cost for the two months?
A. $3,300.00
B. $3,412.50
C. $6,712.50
D. $3,356.25
May: 9,100 units x 0.05 direct labor-hours x $7.50 per direct labor-hour
= $3,412.50
June: 8,800 units x 0.05 direct labor-hours x $7.50 per direct labor-hour
= $3,300.00
Total direct labor cost = $6,712.50
AACSB: Analytic
Level: Easy
9-14
40. The following are budgeted data:
Each unit requires 0.75 hours of direct labor at a cost of $6.50 per hour. What is the cost of
direct labor for May?
A. $73,125
B. $82,875
C. $63,375
D. $78,000
Budgeted direct labor cost = Units produced x Direct labor-hours per unit x Budgeted direct
labor cost per unit = 16,000 x 0.75 direct labor-hours x $6.50 per direct labor-hour = $78,000
AACSB: Analytic
Level: Medium
41. Mouw Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The
direct labor budget indicates that 5,400 direct labor-hours will be required in January. The
variable overhead rate is $4.40 per direct labor-hour. The company's budgeted fixed
manufacturing overhead is $77,220 per month, which includes depreciation of $9,720. All
other fixed manufacturing overhead costs represent current cash flows. The January cash
disbursements for manufacturing overhead on the manufacturing overhead budget should be:
A. $67,500
B. $91,260
C. $100,980
D. $23,760
Variable overhead = 5,400 direct labor-hours x $4.40 = $23,760
Cash portion of fixed manufacturing overhead = $77,220 - $9,720 = $67,500
Total cash disbursement for overhead in January = $23,760 + $67,500 = $91,260
AACSB: Analytic
Level: Easy
9-15
42. Golebiewski Inc. bases its manufacturing overhead budget on budgeted direct labor-hours.
The direct labor budget indicates that 4,900 direct labor-hours will be required in November.
The variable overhead rate is $8.40 per direct labor-hour. The company's budgeted fixed
other fixed manufacturing overhead costs represent current cash flows. The company
recomputes its predetermined overhead rate every month. The predetermined overhead rate
for November should be:
A. $22.30
B. $16.00
C. $24.40
D. $8.40
AACSB: Analytic
Level: Easy
9-16
43. The manufacturing overhead budget at Formica Corporation is based on budgeted direct
labor-hours. The direct labor budget indicates that 4,400 direct labor-hours will be required in
October. The variable overhead rate is $8.90 per direct labor-hour. The company's budgeted
fixed manufacturing overhead is $86,680 per month, which includes depreciation of $16,280.
All other fixed manufacturing overhead costs represent current cash flows. The company
recomputes its predetermined overhead rate every month. The predetermined overhead rate
for October should be:
A. $19.70
B. $24.90
C. $8.90
D. $28.60
AACSB: Analytic
Level: Easy
9-17
44. The manufacturing overhead budget at Ferrucci Corporation is based on budgeted direct
December. The variable overhead rate is $4.40 per direct labor-hour. The company's budgeted
All other fixed manufacturing overhead costs represent current cash flows. The December
cash disbursements for manufacturing overhead on the manufacturing overhead budget should
be:
A. $7,040
B. $19,680
C. $26,720
D. $32,160
Cash disbursements for April = (Variable overhead rate x Number of direct-labor hours) +
(Fixed manufacturing overhead less depreciation)
= ($4.40 x 1,600) + ($25,120 - $5,440)
= $7,040 + $19,680 = $26,720
AACSB: Analytic
Level: Easy
45. Roufs Inc. bases its selling and administrative expense budget on budgeted unit sales. The
sales budget shows 7,800 units are planned to be sold in April. The variable selling and
administrative expense is $3.20 per unit. The budgeted fixed selling and administrative
expense is $95,160 per month, which includes depreciation of $9,360 per month. The
remainder of the fixed selling and administrative expense represents current cash flows. The
cash disbursements for selling and administrative expenses on the April selling and
administrative expense budget should be:
A. $85,800
B. $24,960
C. $120,120
D. $110,760
Cash disbursements for December = (Variable selling and administrative cost x Number of
direct-labor hours) + (Fixed manufacturing overhead less depreciation) = (7,800 x $3.20) +
($95,160 - $9,360) = $24,960 + $85,800 = $110,760
AACSB: Analytic
Level: Easy
9-18
46. The selling and administrative expense budget of Spurlock Corporation is based on
budgeted unit sales, which are 6,300 units for February. The variable selling and
expense is $118,440 per month, which includes depreciation of $19,530 per month. The
remainder of the fixed selling and administrative expense represents current cash flows. The
cash disbursements for selling and administrative expenses on the February selling and
administrative expense budget should be:
A. $98,910
B. $157,500
C. $58,590
D. $177,030
Cash disbursements for December = (Variable selling and administrative cost x Number of
direct-labor hours) + (Fixed manufacturing overhead less depreciation) = (6,300 x $9.30) +
($118,440 - $19,530) = $58,590 + $98,910 = $157,500
AACSB: Analytic
Level: Easy
47. ABC Company has a cash balance of $9,000 on April 1. The company must maintain a
minimum cash balance of $6,000. During April expected cash receipts are $45,000. Expected
cash disbursements during the month total $52,000. During April the company will need to
borrow:
A. $2,000
B. $4,000
C. $6,000
D. $8,000
Excess cash available over disbursements = Beginning cash balance + Budgeted cash receipts
- Budgeted cash disbursements = $9,000 + $45,000 - $52,000 = $2,000
Borrowing = Desired ending cash balance - Excess cash available over disbursements =
$6,000 - $2,000 = $4,000
AACSB: Analytic
Level: Easy
9-19
48. Thiel Inc. is working on its cash budget for October. The budgeted beginning cash balance
is $35,000. Budgeted cash receipts total $166,000 and budgeted cash disbursements total
$162,000. The desired ending cash balance is $50,000. The excess (deficiency) of cash
available over disbursements for October will be:
A. $31,000
B. $39,000
C. $4,000
D. $201,000
AACSB: Analytic
Level: Easy
49. Guthridge Inc. is working on its cash budget for February. The budgeted beginning cash
balance is $26,000. Budgeted cash receipts total $104,000 and budgeted cash disbursements
total $100,000. The desired ending cash balance is $40,000. To attain its desired ending cash
balance for February, the company needs to borrow:
A. $0
B. $10,000
C. $40,000
D. $70,000
Borrowing = Desired ending cash balance - Excess cash available over disbursements =
$40,000 - $30,000 = $10,000
AACSB: Analytic
Level: Easy
9-20
50. The Stacy Company makes and sells a single product, Product R. Budgeted sales for April
are $300,000. Gross Margin is budgeted at 30% of sales dollars. If the net income for April is
budgeted at $40,000, the budgeted selling and administrative expenses are:
A. $133,333
B. $50,000
C. $102,000
D. $78,000
* Solve backwards for this figure: $90,000 - $40,000 = $50,000
AACSB: Analytic
Level: Hard
Noskey Corporation is a merchandising firm. Information pertaining to the company's sales

revenue is presented in the following table.
Management estimates that 5% of credit sales are uncollectible. Of the credit sales that are
collectible, 60% are collected in the month of sale and the remainder in the month following
the sale. Purchases of inventory are equal to next month's cost of goods sold. The cost of
goods sold is 70% of the selling price. All purchases of inventory are on account; 25% are
paid in the month of purchase, and the remainder is paid in the month following the purchase.
9-21

51. Noskey Corporation's budgeted cash collections in July from June credit sales are:
A. $144,000
B. $136,800
C. $96,000
D. $91,200
Cash collections in July from June credit sales
= ($240,000 x 95% collectible portion) x 40% = $91,200
AACSB: Analytic
Level: Medium
52. Noskey Corporation's budgeted total cash receipts in August are:

A. $240,000
B. $294,000
C. $299,400
D. $239,400
AACSB: Analytic
Level: Hard
9-22
53. Noskey Corporation's budgeted total cash payments in July for inventory purchases are:
A. $405,000
B. $283,500
C. $240,000
D. $168,000
Purchases of inventory for June = Next month's total sales x 70% cost of goods sold =
$460,000 x 70% = $322,000
Purchases of inventory for July = Next month's total sales x 70% cost of goods sold =
$240,000 x 70% = $168,000
July cash payments for inventory purchases:
June purchases: $322,000 x 75% = $241,500
July purchases: $168,000 x 25% = $42,000
Total cash payments in July for inventory = $283,500
AACSB: Analytic
Level: Hard
Justin's Plant Store, a retailer, started operations on January 1. On that date, the only assets
were $16,000 in cash and $3,500 in merchandise inventory. For purposes of budget
preparation, assume that the company's cost of goods sold is 60% of sales. Expected sales for
the first four months appear below.
The company desires that the merchandise inventory on hand at the end of each month be
equal to 50% of the next month's merchandise sales (stated at cost). All purchases of
merchandise inventory must be paid in the month of purchase. Sixty percent of all sales
should be for cash; the balance will be on credit. Seventy-five percent of the credit sales
should be collected in the month following the month of sale, with the balance collected in the
following month. Variable selling and administrative expenses should be 10% of sales and
fixed expenses (all depreciation) should be $3,000 per month. Cash payments for the variable
selling and administrative expenses are made during the month the expenses are incurred.
9-23

54. In a budgeted income statement for the month of February, net income would be:
A. $9,000
B. $1,800
C. $0
D. $4,200
AACSB: Analytic
Level: Medium
55. In a budgeted balance sheet, the Merchandise Inventory on February 28:

A. $4,800
B. $7,500
C. $9,600
D. $3,200
Merchandise Inventory on February 28 = 50% of next month's sales at cost
= 50% x ($16,000 x 60%) = $4,800
AACSB: Analytic
Level: Medium
9-24
56. The Accounts Receivable balance that would appear in the March 31 budgeted balance
sheet would be:
A. $15,000
B. $16,000
C. $8,800
D. $12,400
AACSB: Analytic
Level: Medium
57. In a cash budget for March, the total cash receipts would be:
A. $17,800
B. $8,200
C. $20,200
D. $16,000
Cash receipts in March:
AACSB: Analytic
Level: Medium
9-25
58. In a cash budget for March, the total cash disbursements would be:
A. $11,200
B. $13,900
C. $22,300
D. $16,900
Cash disbursements in March:
AACSB: Analytic
Level: Hard
9-26
Dilom Farm Supply is located in a small town in the rural west. Data regarding the store's
operations follow:
Sales are budgeted at $260,000 for November, $230,000 for December, and $210,000 for
January.
Collections are expected to be 55% in the month of sale, 40% in the month following the
sale, and 5% uncollectible.
The cost of goods sold is 80% of sales.
The company purchases 50% of its merchandise in the month prior to the month of sale and
50% in the month of sale. Payment for merchandise is made in the month following the
purchase.
Other monthly expenses to be paid in cash are $21,700.
Monthly depreciation is $17,000.
Ignore taxes.
9-27

59. Expected cash collections in December are:
A. $126,500
B. $230,500
C. $104,000
D. $230,000
AACSB: Analytic
Level: Hard
60. The cost of December merchandise purchases would be:

A. $176,000
B. $208,000
C. $184,000
D. $84,000
AACSB: Analytic
Level: Hard
9-28
61. December cash disbursements for merchandise purchases would be:

A. $184,000
B. $196,000
C. $176,000
D. $84,000
AACSB: Analytic
Level: Hard
9-29
62. The excess (deficiency) of cash available over disbursements for December would be:
A. $12,800
B. $8,600
C. $17,000
D. $4,200
AACSB: Analytic
Level: Hard
9-30
63. The net income (loss) for December would be:

A. $24,300
B. $12,800
C. ($4,200)
D. $7,300
AACSB: Analytic
Level: Hard
9-31
64. The cash balance at the end of December would be:

A. $40,100
B. $28,000
C. $12,100
D. $40,800
AACSB: Analytic
Level: Hard
65. The accounts receivable balance, net of uncollectible accounts, at the end of December
would be:
A. $89,500
B. $92,000
C. $103,500
D. $196,000
Sales in December not yet collected ($230,000 x 40%) = $92,000
AACSB: Analytic
Level: Hard
9-32
66. Accounts payable at the end of December would be:

A. $84,000
B. $92,000
C. $184,000
D. $176,000
Merchandise purchases in December not yet paid [($230,000 x 50%) + ($210,000 x 50%)] x
80% = $176,000
AACSB: Analytic
Level: Hard
9-33
67. Retained earnings at the end of December would be:

A. $342,000
B. $362,600
C. $337,800
D. $338,100
AACSB: Analytic
Level: Hard
9-34
Braston Corporation is a small wholesaler of gourmet food products. Data regarding the
store's operations follow:
January.
purchase.
Ignore taxes.
9-35

68. Expected cash collections in December are:
A. $91,000
B. $330,000
C. $322,000
D. $231,000
AACSB: Analytic
Level: Hard
69. The cost of December merchandise purchases would be:

A. $231,000
B. $119,000
C. $245,000
D. $234,500
AACSB: Analytic
Level: Hard
9-36
70. December cash disbursements for merchandise purchases would be:

A. $119,000
B. $234,500
C. $231,000
D. $238,000
AACSB: Analytic
Level: Hard
9-37
71. The excess (deficiency) of cash available over disbursements for December would be:
A. $20,200
B. $107,600
C. $43,700
D. $63,900
AACSB: Analytic
Level: Hard
9-38
Super Drive is a computer hard drive manufacturer. The company's balance sheet for the
fiscal year ended on November 30 appears below:
Additional information regarding Super Drive's operations appear below:

Sales are budgeted at $520,000 for December and $500,000 for January.
Collections are expected to be 60% in the month of sale and 40% in the month following
sale. There are no bad debts.
80% of the disk drive components are purchased in the month prior to the month of the sale,
and 20% are purchased in the month of the sale. Purchased components comprise 40% of the
cost of goods sold.
Payment for components purchased is made in the month following the purchase.
Assume that the cost of goods sold is 80% of sales.
9-39

72. The budgeted cash collections for the upcoming December should be:
A. $208,000
B. $520,000
C. $402,000
D. $462,000
AACSB: Analytic
Level: Medium
73. The balance in accounts payable on the budgeted balance sheet for December 31 should
be:
A. $161,280
B. $326,400
C. $165,120
D. $403,200
* 32% = Cost of goods sold percent for purchases. If the overall cost of goods sold is 80% of
sales and purchased components are 40% of the total cost of goods sold, then the cost of
goods sold percentage for the purchased components must be 40% x 80%, or 32%.
AACSB: Analytic
Level: Hard
9-40
74. The budgeted gross margin for the month ending December 31 would be:
A. $416,000
B. $104,000
C. $134,000
D. $536,000
AACSB: Analytic
Level: Medium
Richards Company has the following budgeted sales for the first half of next year:
The company is in the process of preparing a cash budget and must determine the expected
cash collections by month. To this end, the following information has been assembled:
Collections on credit sales:
60% in month of sale
9-41

75. Assume that the accounts receivable balance on January 1 is $70,000. Of this amount,
$60,000 represents uncollected December sales and $10,000 represents uncollected November
sales. Given these data, the total cash collected during January would be:
A. $270,000
B. $420,000
C. $345,000
D. $360,000
* December credit sales must be calculated as follows: $60,000 = (30% + 10%) x November
sales, or $150,000.
AACSB: Analytic
Level: Hard
76. What is the budgeted accounts receivable balance on May 31?

A. $81,000
B. $68,000
C. $60,000
D. $141,000
AACSB: Analytic
Level: Hard
9-42
The LaGrange Company had the following budgeted sales for the first half of the current
year:
The company is in the process of preparing a cash budget and must determine the expected
cash collections by month. To this end, the following information has been assembled:
Collections on sales: 60% in month of sale
The accounts receivable balance on January 1 of the current year was $70,000, of which
$50,000 represents uncollected December sales and $20,000 represents uncollected November
sales.
9-43

77. The total cash collected during January by LaGrange Company would be:
A. $410,000
B. $254,000
C. $344,000
D. $331,500
* December credit sales must be calculated as follows: $50,000 = (30% + 10%) x November
sales, or $125,000.
AACSB: Analytic
Level: Hard
78. What is the budgeted accounts receivable balance on June 1 of the current year?
A. $56,000
B. $64,000
C. $76,000
D. $132,000
AACSB: Analytic
Level: Hard
9-44
Pardise Company plans the following beginning and ending inventory levels (in units) for
July:
Two units of raw material are needed to produce each unit of finished product.
79. If Pardise Company plans to sell 480,000 units during July, the number of units it would
have to manufacture during July would be:
A. 440,000 units
B. 480,000 units
C. 510,000 units
D. 450,000 units
AACSB: Analytic
Level: Easy
9-45
80. If 500,000 finished units were to be manufactured during July, the units of raw material
needed to be purchased would be:
A. 1,000,000 units
B. 1,020,000 units
C. 1,010,000 units
D. 990,000 units
AACSB: Analytic
Level: Easy
Sarrazin Corporation is in the process of preparing its annual budget. The following
beginning and ending inventory levels are planned for the year.
Each unit of finished goods requires 8 grams of raw material.
9-46

81. If the company plans to sell 640,000 units during the year, the number of units it would
have to manufacture during the year would be:
A. 670,000 units
B. 640,000 units
C. 690,000 units
D. 590,000 units
AACSB: Analytic
Level: Easy
82. How much of the raw material should the company purchase during the year?
A. 4,720,000 grams
B. 4,700,000 grams
C. 4,730,000 grams
D. 4,740,000 grams
AACSB: Analytic
Level: Medium
9-47
LDG Corporation makes and sells a product called Product WZ. Each unit of Product WZ
requires 2.0 hours of direct labor at the rate of $10.50 per direct labor-hour. Management
would like you to prepare a Direct Labor Budget for June.
83. The budgeted direct labor cost per unit of Product WZ would be:
A. $12.50
B. $10.50
C. $21.00
D. $5.25
Budgeted direct labor cost per unit = Direct labor-hours per unit x Direct labor rate = 2.0 x
$10.50 = $21.00
AACSB: Analytic
Level: Easy
84. The company plans to sell 22,000 units of Product WZ in June. The finished goods
inventories on June 1 and June 30 are budgeted to be 100 and 400 units, respectively.
Budgeted direct labor costs for June would be:
A. $234,150
B. $468,300
C. $462,000
D. $455,700
= 22,000 + 400 - 100 = 22,300
Budgeted direct labor cost per unit = Direct labor-hours per unit x Direct labor rate = 2.0 x
$10.50 = $21.00
Budgeted direct labor cost = Units produced x Budgeted direct labor cost per unit
= 22,300 x $21.00 = $468,300
AACSB: Analytic
Level: Medium
9-48
Detmer Enterprises has budgeted sales for the next five months as follows:
Past experience has shown that the ending inventory for each month should be equal to 10%
of the next month's sales in units. The inventory on December 31 contained 400 units, which
was in excess of the desired level of inventory. The company needs to prepare a Production
Budget for the first quarter of the year.
85. The total number of units needed (i.e., unit sales plus desired ending inventory) in March
is:
A. 6,120 units
B. 6,080 units
C. 5,400 units
D. 5,940 units
Total number of units needed = Ending inventory + Units sold = (7,200 x 10%) + 5,400 =
6,120
AACSB: Analytic
Level: Medium
9-49
86. The total number of units to be produced in January is:

A. 4,480 units
B. 3,800 units
C. 4,080 units
D. 3,500 units
= (6,800 x 10%) + 3,800 - 400 = 4,080
AACSB: Analytic
Level: Medium
87. The desired ending inventory for April is:

A. 460 units
B. 540 units
C. 720 units
D. 680 units
Desired ending inventory for April = 10% of May sales = 10% x 4,600 = 460 units
AACSB: Analytic
Level: Easy
9-50
Roberts Enterprises has budgeted sales in units for the next five months as follows:
Past experience has shown that the ending inventory for each month must be equal to 10% of
the next month's sales in units. The inventory on May 31 contained 410 units. The company
needs to prepare a production budget for the second quarter of the year.
88. The beginning inventory in units for September is:

A. 370 units
B. 6,700 units
C. 530 units
D. 670 units
Beginning inventory for September = Ending inventory for August
Ending inventory for August = 10% x September sales
= 10% x 6,700 = 670 units
AACSB: Analytic
Level: Medium
9-51
89. The total number of units to be produced in July is:

A. 7,630 units
B. 7,100 units
C. 6,920 units
D. 7,280 units
= (5,300 x 10%) + 7,100 - (7,100 x 10%) = 6,920 units
AACSB: Analytic
Level: Medium
90. The desired ending inventory for August is:

A. 530 units
B. 670 units
C. 710 units
D. 370 units
Ending inventory for August = 10% of September sales = 10% x 6,700 = 670 units
AACSB: Analytic
Level: Easy
Hardin, Inc, has budgeted sales in units for the next five months as follows:
Past experience has shown that the ending inventory for each month should be equal to 15%
of the next month's sales in units. The inventory on May 31 contained 1,020 units. The
company needs to prepare a production budget for the next five months.
9-52

91. The beginning inventory for September should be:
A. 900 units
B. 1,035 units
C. 1,020 units
D. 1,050 units
Beginning inventory for September = Ending inventory for August
Ending inventory for August = 15% x September sales = 15% x 7,000 = 1,050 units
AACSB: Analytic
Level: Easy
92. The total number of units produced in July should be:

A. 6,500 units
B. 5,600 units
C. 5,660 units
D. 5,540 units
= (6,000 x 15%) + 5,600 - (5,600 x 15%) = 5,660
AACSB: Analytic
Level: Easy
9-53
Coles Company, Inc. makes and sells a single product, Product R. Three yards of Material K
are needed to make one unit of Product R. Budgeted production of Product R for the next five
months is as follows:
The company wants to maintain monthly ending inventories of Material K equal to 20% of
the following month's production needs. On July 31, this requirement was not met since only
2,500 yards of Material K were on hand. The cost of Material K is $0.85 per yard. The
company wants to prepare a Direct Materials Purchase Budget for the rest of the year.
93. The total cost of Material K to be purchased in August is:

A. $40,970
B. $48,200
C. $33,840
D. $42,300
AACSB: Analytic
Level: Medium
9-54
94. The desired ending inventory of Material K for the month of September is:
A. 7,560 yards
B. 8,400 yards
C. 8,700 yards
D. 9,300 yards
AACSB: Analytic
Level: Medium
95. The total needs (i.e., production requirements plus desired ending inventory) of Material
K for the month of November are:
A. 37,800 yards
B. 44,940 yards
C. 37,380 yards
D. 45,360 yards
AACSB: Analytic
Level: Medium
9-55
Castil Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 2.5
kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five
months is as follows:
The company wants to maintain monthly ending inventories of Jurislon equal to 20% of the
following month's production needs. On July 31, this requirement was not met since only
9,700 kilograms of Jurislon were on hand. The cost of Jurislon is $5.00 per kilogram. The
company wants to prepare a Direct Materials Purchase Budget for the next five months.
96. The desired ending inventory of Jurislon for the month of September is:
A. $20,900
B. $52,000
C. $52,250
D. $20,800
AACSB: Analytic
Level: Medium
9-56
97. The total cost of Jurislon to be purchased in August is:

A. $302,250
B. $451,500
C. $250,000
D. $253,750
AACSB: Analytic
Level: Medium
9-57
Smith Company makes and sells a single product called a Pod. Each Pod requires 1.4 hours
of labor at a labor rate of $9.60 per hour. Smith Company needs to prepare a Direct Labor
Budget for the second quarter of the year.
98. If the budgeted direct labor cost for April is $201,600, then the budgeted production of
Pods for April would be:
A. 21,000 units
B. 29,400 units
C. 18,273 units
D. 15,000 units
Budgeted labor cost per Pod = Direct labor hours required per Pod x Direct labor rate per hour
= 1.4 x $9.60 = $13.44
Budgeted production in units = Total budgeted direct labor cost Per unit budgeted cost =
$201,600 $13.44 = 15,000 units
AACSB: Analytic
Level: Easy
99. The budgeted direct labor cost per Pod would be:
A. $13.44
B. $9.60
C. $7.38
D. $11.00
= 1.4 x $9.60 = $13.44
AACSB: Analytic
Level: Easy
9-58
100. In June the company has budgeted to produce 22,000 Pods. The finished goods inventory
on June 1 and June 30 were budgeted at 500 and 800 units, respectively. Budgeted direct labor
costs incurred in June would be:
A. $470,400
B. $295,680
C. $240,000
D. $211,200
= 1.4 x $9.60 = $13.44
AACSB: Analytic
Level: Easy
The LFM Company makes and sells a single product, Product T. Each unit of Product T
requires 1.3 hours of direct labor at a rate of $9.10 per direct labor-hour. LFM Company needs
to prepare a Direct Labor Budget for the second quarter of next year.
101. The budgeted direct labor cost per unit of Product T would be:
A. $9.10
B. $11.83
C. $7.00
D. $10.40
Budgeted labor cost per Product T = Direct labor-hour required per T x Direct labor rate per
hour = 1.3 x $9.10 = $11.83
AACSB: Analytic
Level: Easy
9-59
102. The company has budgeted to produce 25,000 units of Product T in June. The finished
goods inventories on June 1 and June 30 were budgeted at 500 and 700 units, respectively.
Budgeted direct labor costs for June would be:
A. $293,384
B. $304,031
C. $295,750
D. $227,500
Budgeted labor cost per Product T = Direct labor-hour required per T x Direct labor rate per
hour = 1.3 x $9.10 = $11.83
AACSB: Analytic
Level: Medium
The Culver Company is preparing its Manufacturing Overhead Budget for the third quarter of
the year. Budgeted variable factory overhead is $3.00 per unit produced; budgeted fixed
factory overhead is $75,000 per month, with $16,000 of this amount being factory
depreciation.
9-60

103. If the budgeted production for July is 6,000 units, then the total budgeted factory
overhead for July is:
A. $77,000
B. $82,000
C. $85,000
D. $93,000
AACSB: Analytic
Level: Easy
104. If the budgeted production for August is 5,000 units, then the total budgeted factory
overhead per unit is:
A. $15
B. $18
C. $20
D. $22
AACSB: Analytic
Level: Easy
9-61
105. If the budgeted cash disbursements for factory overhead for September are $80,000, then
the budgeted production for September must be:
A. 7,400 units
B. 6,200 units
C. 6,500 units
D. 7,000 units
AACSB: Analytic
Level: Medium
The Charade Company is preparing its Manufacturing Overhead budget for the fourth quarter
of the year. The budgeted variable factory overhead is $5.00 per direct labor-hour; the
budgeted fixed factory overhead is $75,000 per month, of which $15,000 is factory
depreciation.
9-62

106. If the budgeted direct labor time for November is 7,000 hours, then the total budgeted
factory overhead for November is:
A. $95,000
B. $110,000
C. $75,000
D. $125,000
AACSB: Analytic
Level: Easy
107. If the budgeted cash disbursements for factory overhead for December total $105,000,
then the budgeted direct labor-hours for December must be:
A. 6,000 hours
B. 21,000 hours
C. 9,000 hours
D. 3,000 hours
AACSB: Analytic
Level: Hard
9-63
108. If the budgeted direct labor time for December is 8,000 hours, then total budgeted
factory overhead per direct labor-hour is (rounded):
A. $14.38
B. $9.38
C. $12.50
D. $16.25
AACSB: Analytic
Level: Medium
Davie Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of
the year. The budgeted variable factory overhead rate is $6.00 per direct labor-hour; the
budgeted fixed factory overhead is $92,000 per month, of which $16,000 is factory
depreciation.
9-64

109. If the budgeted direct labor time for October is 8,000 hours, then the total budgeted
factory overhead for October is:
A. $140,000
B. $76,000
C. $64,000
D. $124,000
AACSB: Analytic
Level: Easy
110. If the budgeted direct labor time for November is 9,000 hours, then the total budgeted
cash disbursements for November must be:
A. $130,000
B. $146,000
C. $70,000
D. $76,000
AACSB: Analytic
Level: Medium
9-65
111. If the budgeted direct labor time for December is 4,000 hours, then the predetermined
factory overhead per direct labor-hour for December would be:
A. $6.00
B. $29.00
C. $25.00
D. $10.00
AACSB: Analytic
Level: Medium
Dano Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The
other fixed manufacturing overhead costs represent current cash flows. The direct labor
budget indicates that 7,600 direct labor-hours will be required in December.
9-66

112. The December cash disbursements for manufacturing overhead on the manufacturing
overhead budget should be:
A. $92,720
B. $121,600
C. $81,320
D. $11,400
AACSB: Analytic
Level: Easy
113. The company recomputes its predetermined overhead rate every month. The
predetermined overhead rate for December should be:
A. $14.50
B. $12.20
C. $16.00
D. $1.50
AACSB: Analytic
Level: Easy
9-67
The manufacturing overhead budget at Waycaster Corporation is based on budgeted direct

February. The variable overhead rate is $3.40 per direct labor-hour. The company's budgeted
All other fixed manufacturing overhead costs represent current cash flows.
114. The company recomputes its predetermined overhead rate every month. The
predetermined overhead rate for February should be:
A. $17.00
B. $13.60
C. $14.00
D. $3.40
AACSB: Analytic
Level: Easy
9-68
115. The February cash disbursements for manufacturing overhead on the manufacturing
overhead budget should be:
A. $20,400
B. $63,600
C. $102,000
D. $84,000
AACSB: Analytic
Level: Easy
Porus Corporation makes and sells a single product called a Yute. The company is in the
process of preparing its Selling and Administrative Expense Budget for the last quarter of the
year. The following budget data are available:
All of these expenses (except depreciation) are paid in cash in the month they are incurred.
9-69

116. If the company has budgeted to sell 19,000 Yutes in November, then the total budgeted
selling and administrative expenses for November would be:
A. $529,100
B. $189,000
C. $340,100
D. $528,100
AACSB: Analytic
Level: Medium
117. If the company has budgeted to sell 20,000 Yutes in December, then the budgeted total
cash disbursements for selling and administrative expenses for December would be:
A. $546,000
B. $547,000
C. $189,000
D. $358,000
AACSB: Analytic
Level: Medium
9-70
118. If the total budget for selling and administrative expense for October is $493,300, then
how many Yutes does the company plan to sell in October?
A. 17,500 units
B. 17,000 units
C. 17,200 units
D. 16,700 units
AACSB: Analytic
Level: Hard
The Adams Company, a merchandising firm, has budgeted its activity for November
according to the following information:
Sales at $450,000, all for cash
Merchandise inventory on October 31 was $200,000.
The cash balance November 1 was $18,000.
Selling and administrative expenses are budgeted at $60,000 for November and are paid for
in cash.
Budgeted depreciation for November is $25,000.
The planned merchandise inventory on November 30 is $230,000.
The cost of goods sold is 70% of the selling price.
All purchases are paid for in cash.
9-71

119. The budgeted cash receipts for November are:
A. $315,000
B. $450,000
C. $135,000
D. $475,000
Budgeted cash receipts for November:
Sales = $450,000 (All sales are cash)
AACSB: Analytic
Level: Easy
120. The budgeted cash disbursements for November are:

A. $345,000
B. $375,000
C. $530,000
D. $405,000
AACSB: Analytic
Level: Medium
9-72
121. The budgeted net income for November is:

A. $50,000
B. $68,000
C. $75,000
D. $135,000
AACSB: Analytic
Level: Medium
Palmerin Corporation is preparing its cash budget for November. The budgeted beginning
cash balance is $30,000. Budgeted cash receipts total $167,000 and budgeted cash
disbursements total $171,000. The desired ending cash balance is $50,000.
9-73

122. The excess (deficiency) of cash available over disbursements for November is:
A. $34,000
B. ($4,000)
C. $26,000
D. $197,000
AACSB: Analytic
Level: Easy
123. To attain its desired ending cash balance for November, the company should borrow:
A. $0
B. $76,000
C. $50,000
D. $24,000
AACSB: Analytic
Level: Easy
9-74
Crose Inc. is working on its cash budget for November. The budgeted beginning cash balance
is $22,000. Budgeted cash receipts total $118,000 and budgeted cash disbursements total
$116,000. The desired ending cash balance is $40,000.
124. The excess (deficiency) of cash available over disbursements for November will be:
A. $2,000
B. $20,000
C. $24,000
D. $140,000
AACSB: Analytic
Level: Easy
125. To attain its desired ending cash balance for November, the company needs to borrow:
A. $16,000
B. $40,000
C. $0
D. $64,000
AACSB: Analytic
Level: Easy
9-75
Carner Lumber sells lumber and general building supplies to building contractors in a
medium-sized town in Montana. Data regarding the store's operations follow:
January.
purchase.
Ignore taxes.
9-76

126. The net income for December would be:
A. $59,200
B. $83,400
C. $66,400
D. $72,600
AACSB: Analytic
Level: Hard
9-77
127. The cash balance at the end of December would be:

A. $91,600
B. $205,500
C. $186,500
D. $19,000
AACSB: Analytic
Level: Hard
9-78
128. The accounts receivable balance, net of uncollectible accounts, at the end of December
would be:
A. $94,900
B. $46,800
C. $90,200
D. $54,000
Sales in December not yet collected ($360,000 x 13%) = $46,800
AACSB: Analytic
Level: Hard
129. Accounts payable at the end of December would be:

A. $176,400
B. $252,000
C. $247,800
D. $71,400
Merchandise purchases in December not yet paid [($340,000 x 30%) + ($360,000 x 70%)] x
70% = $247,800
AACSB: Analytic
Level: Hard
9-79
130. Retained earnings at the end of December would be:

A. $224,500
B. $147,900
C. $88,700
D. $209,900
AACSB: Analytic
Level: Hard
9-80
Essay Questions
131. Carter Company has projected sales and production in units for the second quarter of
next year as follows:
Required:
a. Cash production costs are budgeted at $6 per unit produced. Of these production costs, 40%
are paid in the month in which they are incurred and the balance in the following month.
Selling and administrative expenses (all of which are paid in cash) amount to $120,000 per
month. The accounts payable balance on March 31 totals $192,000, all of which will be paid
in April. Prepare a schedule for each month showing budgeted cash disbursements for Carter
Company.
b. Assume that all units will be sold on account for $15 each. Cash collections from sales are
budgeted at 60% in the month of sale, 30% in the month following the month of sale, and the
remaining 10% in the second month following the month of sale. Accounts receivable on
March 31 totaled $510,000 $(90,000 from February's sales and the remainder from March).
Prepare a schedule for each month showing budgeted cash receipts for Carter Company.
9-81
AACSB: Analytic
Level: Medium
9-82
132. Weltin Industrial Gas Corporation supplies acetylene and other compressed gases to
industry. Data regarding the store's operations follow:
January.
purchase.
Ignore taxes.
Required:
a. Prepare a Schedule of Expected Cash Collections for November and December.
b. Prepare a Merchandise Purchases Budget for November and December.
c. Prepare Cash Budgets for November and December.
d. Prepare Budgeted Income Statements for November and December.
e. Prepare a Budgeted Balance Sheet for the end of December.
9-83
9-84
AACSB: Analytic
Level: Hard
9-85
133. TabComp Inc. is a retail distributor for MZB-33 computer hardware and related
software. TabComp prepares annual sales forecasts of which the first six months of the
coming year are presented below.
Cash sales account for 25% of TabComp's total sales, 30% of the total sales are paid by bank
credit card, and the remaining 45% are on open account (TabComp's own charge accounts).
The cash and bank credit card sale payments are received in the month of the sale. Bank credit
card sales are subject to a 4 % discount which is deducted immediately. The cash receipts for
sales on open account are 70% in the month following the sale, 28% in the second month
following the sale, and the remaining are uncollectible.
TabComp's month-end inventory requirements for computer hardware units are 30% of the
next month's sales. The units must be ordered two months in advance due to long lead times
quoted by the manufacturer.
Required:
a. Calculate the cash that TabComp can expect to collect during April. Show all of your
calculations.
b. Determine the number of computer hardware units that should be ordered in January. Show
all of your calculations.
9-86

a. The cash that TabComp can expect to collect during April is calculated below.
b. The number of units that TabComp should order in January is calculated as follows.
AACSB: Analytic
Level: Hard
9-87
134. Capid Corporation is a wholesaler of industrial goods. Data regarding the store's
operations follow:
January.
purchase.
The November beginning balance in the accounts receivable account is $77,000.
The November beginning balance in the accounts payable account is $271,000.
Required:
a. Prepare a Schedule of Expected Cash Collections for November and December.
b. Prepare a Merchandise Purchases Budget for November and December.
AACSB: Analytic
Level: Medium
9-88
135. Tilson Company has projected sales and production in units for the second quarter of the
coming year as follows:
Cash-related production costs are budgeted at $7 per unit produced. Of these production costs,
40% are paid in the month in which they are incurred and the balance in the following month.
Selling and administrative expenses will amount to $110,000 per month. The accounts
payable balance on March 31 totals $193,000, which will be paid in April.
All units are sold on account for $16 each. Cash collections from sales are budgeted at 60% in
the month of sale, 30% in the month following the month of sale, and the remaining 10% in
the second month following the month of sale. Accounts receivable on April 1 totaled
$520,000 $(100,000 from February's sales and the remainder from March).
Required:
a. Prepare a schedule for each month showing budgeted cash disbursements for the Tilson
Company.
b. Prepare a schedule for each month showing budgeted cash receipts for Tilson Company.
9-89
Payments relating to the prior month (March) in April represent the balance of accounts
payable at March 31.
AACSB: Analytic
Level: Hard
9-90
136. A sales budget is given below for one of the products manufactured by the Key Co.:
The inventory of finished goods at the end of each month must equal 20% of the next month's
sales. On December 31, the finished goods inventory totaled 4,000 units.
Each unit of product requires three specialized electrical switches. Since the production of
these specialized switches by Key's suppliers is sometimes irregular, the company has a policy
of maintaining an ending inventory at the end of each month equal to 30% of the next month's
production needs. This requirement had been met on January 1 of the current year.
Required:
Prepare a budget showing the quantity of switches to be purchased each month for January,
February, and March and in total for the quarter.
The company's production budget is as follows:
The materials purchases budget (based on the above production budget) would be as follows:
*69,000 x 0.30 =20,700

**38,000 x 3 = 114,000; 114,000 x 0.30 = 34,200
9-91
AACSB: Analytic
Level: Medium
137. Glinski Corporation is working on its direct labor budget for the next two months. Each
unit of output requires 0.29 direct labor-hours. The direct labor rate is $7.00 per direct laborhour. The production budget calls for producing 5,600 units in June and 6,100 units in July.
Required:
Construct the direct labor budget for the next two months, assuming that the direct labor work
force is fully adjusted to the total direct labor-hours needed each month.
AACSB: Analytic
Level: Easy
9-92
138. Deviney Corporation is working on its direct labor budget for the next two months. Each
unit of output requires 0.86 direct labor-hours. The direct labor rate is $8.20 per direct laborhour. The production budget calls for producing 6,500 units in July and 6,000 units in August.
The company guarantees its direct labor workers a 40-hour paid work week. With the number
of workers currently employed, that means that the company is committed to paying its direct
labor work force for at least 5,600 hours in total each month even if there is not enough work
to keep them busy.
Required:
Construct the direct labor budget for the next two months.
AACSB: Analytic
Level: Medium
9-93
139. Gokey Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The
other fixed manufacturing overhead costs represent current cash flows. The November direct
labor budget indicates that 5,400 direct labor-hours will be required in that month.
Required:
a. Determine the cash disbursement for manufacturing overhead for November.
b. Determine the predetermined overhead rate for November.
AACSB: Analytic
Level: Easy
9-94
140. The manufacturing overhead budget of Inch Corporation is based on budgeted direct
labor-hours. The September direct labor budget indicates that 4,400 direct labor-hours will be
required in that month. The variable overhead rate is $5.00 per direct labor-hour. The
company's budgeted fixed manufacturing overhead is $59,400 per month, which includes
depreciation of $10,560. All other fixed manufacturing overhead costs represent current cash
flows.
Required:
a. Determine the cash disbursement for manufacturing overhead for September. Show your
work!
b. Determine the predetermined overhead rate for September. Show your work!
AACSB: Analytic
Level: Easy
9-95
141. Borling Inc. bases its selling and administrative expense budget on the number of units
sold. The variable selling and administrative expense is $8.30 per unit. The budgeted fixed
selling and administrative expense is $93,870 per month, which includes depreciation of
$16,380. The remainder of the fixed selling and administrative expense represents current
cash flows. The sales budget shows 6,300 units are planned to be sold in July.
Required:
Prepare the selling and administrative expense budget for July.
AACSB: Analytic
Level: Easy
9-96
142. The selling and administrative expense budget of Hiser Corporation is based on the
number of units sold, which are budgeted to be 1,900 units in August. The variable selling and
expense is $22,420 per month, which includes depreciation of $5,130. The remainder of the
fixed selling and administrative expense represents current cash flows.
Required:
Prepare the selling and administrative expense budget for August.
AACSB: Analytic
Level: Easy
9-97
143. Matuseski Corporation is preparing its cash budget for October. The budgeted beginning
cash balance is $17,000. Budgeted cash receipts total $187,000 and budgeted cash
disbursements total $177,000. The desired ending cash balance is $40,000. The company can
borrow up to $120,000 at any time from a local bank, with interest not due until the following
month.
Required:
Prepare the company's cash budget for October in good form.
AACSB: Analytic
Level: Easy
9-98
144. Payment Inc. is preparing its cash budget for February. The budgeted beginning cash
balance is $27,000. Budgeted cash receipts total $136,000 and budgeted cash disbursements
total $128,000. The desired ending cash balance is $50,000. The company can borrow up to
$110,000 at any time from a local bank, with interest not due until the following month.
Required:
Prepare the company's cash budget for February in good form. Make sure to indicate what
borrowing, if any, would be needed to attain the desired ending cash balance.
AACSB: Analytic
Level: Easy
9-99

Chap 009

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Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Total cash receipts in April would be budgeted to be:

Chapter 009, Profit Planning Key

Cash collections in June would be:

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Budgeted production for August would be:

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

40. The following are budgeted data:

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

* Solve backwards for this figure: $90,000 - $40,000 = $50,000

Noskey Corporation is a merchandising firm. Information pertaining to the company's sales

Chapter 009, Profit Planning Key

52. Noskey Corporation's budgeted total cash receipts in August are:

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

55. In a budgeted balance sheet, the Merchandise Inventory on February 28:

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

60. The cost of December merchandise purchases would be:

Chapter 009, Profit Planning Key

61. December cash disbursements for merchandise purchases would be:

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

63. The net income (loss) for December would be:

Chapter 009, Profit Planning Key

64. The cash balance at the end of December would be:

Chapter 009, Profit Planning Key

66. Accounts payable at the end of December would be:

Chapter 009, Profit Planning Key

67. Retained earnings at the end of December would be:

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

69. The cost of December merchandise purchases would be:

Chapter 009, Profit Planning Key

70. December cash disbursements for merchandise purchases would be:

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Additional information regarding Super Drive's operations appear below:

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

76. What is the budgeted accounts receivable balance on May 31?

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key

Chapter 009, Profit Planning Key