Question 81. If the required direct materials purchases are 24,000 pounds, th

81. If the required direct materials purchases are 24,000 pounds, the direct materials required for production is three times the direct materials purchases, and the beginning direct materials are three and a half times the direct materials purchases, what are the desired ending direct materials in pounds?

a. 60,000

b. 12,000

c. 36,000

d. 24,000

82. Dart, Inc. makes and sells umbrellas. The company is in the process of preparing its Selling and Administrative Expense Budget for the last half of the year. The following budget data are available:

Variable Cost Per Unit Sold Monthly Fixed Cost

Sales commissions $0.60 $ 6,000

Shipping 1.20

Advertising 0.30

Executive salaries 40,000

Depreciation on office equipment 8,000

Other 0.35 28,000

Expenses are paid in the month incurred. If the company has budgeted to sell 8,000 umbrellas in October, how much is the total budgeted variable selling and administrative expenses for October?

a. $16,800

b. $18,400

c. $101,600

d. $19,600

83. Which of the following expenses would not appear on a selling and administrative expense budget?

a. Sales commissions

b. Depreciation

c. Property taxes

d. Indirect labor

84. Which of the following would not appear as a fixed expense on a selling and administrative expense budget?

a. Freight-out

b. Office salaries

c. Property taxes

d. Depreciation

85. A master budget consists of

a. an interrelated long-term plan and operating budgets.

b. financial budgets and a long-term plan.

c. interrelated financial budgets and operating budgets.

d. all the accounting journals and ledgers used by a company.

86. The starting point in preparing a master budget is the preparation of the

a. production budget.

b. sales budget.

c. purchasing budget.

d. personnel budget.

87. Which one of the following is not needed in preparing a production budget?

a. Budgeted unit sales

b. Budgeted raw materials

c. Beginning finished goods units

d. Ending finished goods units

88. A company budgeted unit sales of 204,000 units for January, 2013 and 240,000 units for February 2013. The company has a policy of having an inventory of units on hand at the end of each month equal to 30% of next month’s budgeted unit sales. If there were 61,200 units of inventory on hand on December 31, 2012, how many units should be produced in January, 2013 in order for the company to meet its goals?

a. 214,800 units

b. 204,000 units

c. 193,200 units

d. 276,000 units

89. At January 1, 2013, Deer Corp. has beginning inventory of 2,000 surfboards. Deer estimates it will sell 10,000 units during the first quarter of 2013 with a 12% increase in sales each quarter. Deer’s policy is to maintain an ending inventory equal to 25% of the next quarter’s sales. Each surfboard costs $100 and is sold for $150. How much is budgeted sales revenue for the third quarter of 2013?

a. $450,000

b. $1,950,000

c. $1,881,600

d. $12,544

90. Doe Manufacturing plans to sell 6,000 purple lawn chairs during May, 5,700 in June, and 6,000 during July. The company keeps 15% of the next month’s sales as ending inventory. How many units should Doe produce during June?

a. 5,745

b. 6,600

c. 5,655

d. Not enough information to determine.

91. Strand Company is planning to sell 400 buckets and produce 380 buckets during March. Each bucket requires 500 grams of plastic and one-half hour of direct labor. Plastic costs $10 per 500 grams and employees of the company are paid $15.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Strand has 300 kilos of plastic in beginning inventory and wants to have 200 kilos in ending inventory. How much is the total amount of budgeted direct labor for March?

a. $3,000

b. $6,000

c. $2,850

d. $5,7000

92. Teller Co. is planning to sell 900 boxes of ceramic tile, with production estimated at 870 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. Teller has 3,900 pounds of clay mix in beginning inventory and wants to have 4,500 pounds in ending inventory.

What is the total amount to be budgeted for manufacturing overhead for the month?

a. $2,871

b. $2,970

c. $11,484

d. $11,880

93. Teller Co. is planning to sell 900 boxes of ceramic tile, with production estimated at 870 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. Teller has 3,900 pounds of clay mix in beginning inventory and wants to have 4,500 pounds in ending inventory.

What is the total amount to be budgeted for direct labor for the month?

a. $2,610

b. $10,440

c. $2,700

d. $41,760

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