221. Colorado Corporation has the following sales forecast for the next quarter:
July, 4,000 units; August, 4,800 units; September, 5,600 units Sales totaled 3,200 units in June. The June ending finished goods inventory was 800 units. End-of-month finished goods inventory levels are planned to be equal to 30 percent of the next month's planned sales.
The planned ending inventory of finished goods for August is
a. 1,200 units.
b. 1,680 units.
c. 1,460 units.
d. 3,200 units.
5,600 × 0.30 = 1,680 units
222. Colorado Corporation has the following sales forecast for the next quarter:
July, 4,000 units; August, 4,800 units; September, 5,600 units Sales totaled 3,200 units in June. The June ending finished goods inventory was 800 units. End-of-month finished goods inventory levels are planned to be equal to 30 percent of the next month's planned sales. Records showed that each unit is budgeted at 2 pounds of materials costing $3 per pound. Direct labor was budgeted at .5 direct labor hours per unit at a wage of $20 per hour. Budgeted variable overhead is $1.50 per direct labor hour. Fixed overhead is budgeted at $250,000 for the year, and 50,000 units are expected to be produced.
223. After preparing a finished goods inventory budget for August, what is the total ending inventory cost?
a. $26,100
b. $31,755
c. $69,600
d. $36,540
5,600 × 0.30 = 1,680 units × $21.75 = $36,540
DM 2 × $3 = $ 6.00
DL .5 × $20 = $ 10.00
VOH .5 × $1.50 = $ 0.75
FOH $250,000/50,000 = $ 5.00
Total unit cost $ 21.75
224. Colorado Corporation has the following sales forecast for the next quarter:
July, 4,000 units; August, 4,800 units; September, 5,600 units Sales totaled 3,200 units in June. The June ending finished goods inventory was 800 units. End-of-month finished goods inventory levels are planned to be equal to 30 percent of the next month's planned sales. Records showed that each unit is budgeted at 2 pounds of materials costing $3 per pound. Direct labor was budgeted at .5 direct labor hours per unit at a wage of $20 per hour. Budgeted variable overhead is $1.50 per direct labor hour. Fixed overhead is budgeted at $250,000 for the year, and 50,000 units are expected to be produced.
The beginning finished inventory is valued at $31,320.
After preparing a finished goods inventory budget for August, what is the cost of goods sold for August?
a. $104,400
b. $109,620
c. $67,860
d. $140,940
DM 2 × $3 = $ 6.00
DL .5 × $20 = $10.00
VOH .5 × $1.50 = $ 0.75
FOH $250,000/50,000 = $ 5.00
Total unit cost $ 21.75
4800 × $21.75 = $104,400
225. The following forecasted sales pertain to Rapid City:
Month: Sales
June: $160,000
July: 200,000
August: 120,000
September: 80,000
Finished goods inventory as of May 31 6,000 units
Rapid City has a selling price of $5 per unit and expects to maintain ending inventories equal to 25 percent of next month's sales.
What is the budgeted beginning balance in units for finished goods inventory on August 1?
a. 8,000 units
b. 6,000 units
c. 10,000 units
d. 6,400 units
($120,000 × 0.25)/$5 = 6,000 units
226. Dali, Inc. is constructing its marketing budget.
Commissions are $3 per unit sold. Salesperson salaries are $100,000 per quarter. Depreciation is $25,000 per quarter. Travel is $10,000 per quarter. Advertising is $50,000 in the first quarter; $40,000 in the second quarter; $60,000 in the third quarter; and $55,000 in the fourth quarter. What is the budgeted marketing expense for the third quarter?
a. $795,000
b. $735,000
c. $360,000
d. $345,000
3rd Quarter
Commissions $3 × $50,000 $150,000
Salaries $100,000
Depreciation $25,000
Travel $10,000
Advertising $60,000
Marketing Budget $345,000
227. In a merchandising organization, the merchandise purchases budget replaces what budget from a manufacturing firm?
a. the administrative expense budget
b. the pro-forma income statement
c. the production budget
d. the cost of goods sold budget
228. What is the formula used to compute the units to be produced?
a. Units produced = Units sold
b. Units produced = Units sold + Units in beginning inventory + Units in ending inventory
c. Units produced = Units sold + Units in beginning inventory – Units in ending inventory
d. Units Produced = Units sold – Units in beginning inventory + Units in ending inventory
229. Which of the following is a financial budget?
a. capital expenditures budget
b. sales budget
c. budgeted income statement
d. overhead budget
230. Which of the following is NOT a component of the Cash Budget?
a. Sales forecast
b. Cash Disbursements
c. Financing
d. Cash excess or deficiency
July, 4,000 units; August, 4,800 units; September, 5,600 units Sales totaled 3,200 units in June. The June ending finished goods inventory was 800 units. End-of-month finished goods inventory levels are planned to be equal to 30 percent of the next month's planned sales.
The planned ending inventory of finished goods for August is
a. 1,200 units.
b. 1,680 units.
c. 1,460 units.
d. 3,200 units.
5,600 × 0.30 = 1,680 units
222. Colorado Corporation has the following sales forecast for the next quarter:
July, 4,000 units; August, 4,800 units; September, 5,600 units Sales totaled 3,200 units in June. The June ending finished goods inventory was 800 units. End-of-month finished goods inventory levels are planned to be equal to 30 percent of the next month's planned sales. Records showed that each unit is budgeted at 2 pounds of materials costing $3 per pound. Direct labor was budgeted at .5 direct labor hours per unit at a wage of $20 per hour. Budgeted variable overhead is $1.50 per direct labor hour. Fixed overhead is budgeted at $250,000 for the year, and 50,000 units are expected to be produced.
223. After preparing a finished goods inventory budget for August, what is the total ending inventory cost?
a. $26,100
b. $31,755
c. $69,600
d. $36,540
5,600 × 0.30 = 1,680 units × $21.75 = $36,540
DM 2 × $3 = $ 6.00
DL .5 × $20 = $ 10.00
VOH .5 × $1.50 = $ 0.75
FOH $250,000/50,000 = $ 5.00
Total unit cost $ 21.75
224. Colorado Corporation has the following sales forecast for the next quarter:
July, 4,000 units; August, 4,800 units; September, 5,600 units Sales totaled 3,200 units in June. The June ending finished goods inventory was 800 units. End-of-month finished goods inventory levels are planned to be equal to 30 percent of the next month's planned sales. Records showed that each unit is budgeted at 2 pounds of materials costing $3 per pound. Direct labor was budgeted at .5 direct labor hours per unit at a wage of $20 per hour. Budgeted variable overhead is $1.50 per direct labor hour. Fixed overhead is budgeted at $250,000 for the year, and 50,000 units are expected to be produced.
The beginning finished inventory is valued at $31,320.
After preparing a finished goods inventory budget for August, what is the cost of goods sold for August?
a. $104,400
b. $109,620
c. $67,860
d. $140,940
DM 2 × $3 = $ 6.00
DL .5 × $20 = $10.00
VOH .5 × $1.50 = $ 0.75
FOH $250,000/50,000 = $ 5.00
Total unit cost $ 21.75
4800 × $21.75 = $104,400
225. The following forecasted sales pertain to Rapid City:
Month: Sales
June: $160,000
July: 200,000
August: 120,000
September: 80,000
Finished goods inventory as of May 31 6,000 units
Rapid City has a selling price of $5 per unit and expects to maintain ending inventories equal to 25 percent of next month's sales.
What is the budgeted beginning balance in units for finished goods inventory on August 1?
a. 8,000 units
b. 6,000 units
c. 10,000 units
d. 6,400 units
($120,000 × 0.25)/$5 = 6,000 units
226. Dali, Inc. is constructing its marketing budget.
| 1st quarter | 2nd quarter | 3rd quarter | 4th quarter | |
| Sales | 30,000 | 40,000 | 50,000 | 60,000 |
| Production | 35,000 | 45,000 | 55,000 | 65,000 |
Commissions are $3 per unit sold. Salesperson salaries are $100,000 per quarter. Depreciation is $25,000 per quarter. Travel is $10,000 per quarter. Advertising is $50,000 in the first quarter; $40,000 in the second quarter; $60,000 in the third quarter; and $55,000 in the fourth quarter. What is the budgeted marketing expense for the third quarter?
a. $795,000
b. $735,000
c. $360,000
d. $345,000
3rd Quarter
Commissions $3 × $50,000 $150,000
Salaries $100,000
Depreciation $25,000
Travel $10,000
Advertising $60,000
Marketing Budget $345,000
227. In a merchandising organization, the merchandise purchases budget replaces what budget from a manufacturing firm?
a. the administrative expense budget
b. the pro-forma income statement
c. the production budget
d. the cost of goods sold budget
228. What is the formula used to compute the units to be produced?
a. Units produced = Units sold
b. Units produced = Units sold + Units in beginning inventory + Units in ending inventory
c. Units produced = Units sold + Units in beginning inventory – Units in ending inventory
d. Units Produced = Units sold – Units in beginning inventory + Units in ending inventory
229. Which of the following is a financial budget?
a. capital expenditures budget
b. sales budget
c. budgeted income statement
d. overhead budget
230. Which of the following is NOT a component of the Cash Budget?
a. Sales forecast
b. Cash Disbursements
c. Financing
d. Cash excess or deficiency
