1:

Sarter Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.

	Beginning Inventory	Ending Inventory
Finished goods (units)	31,000	81,000
Raw material (grams)	61,000	51,000

Each unit of finished goods requires 2 grams of raw material.

The company plans to sell 780,000 units during the year, how much of the raw material should the company purchase during the year?

1,660,000 grams

1,650,000 grams

1,681,000 grams

1,711,000 grams

2:

The WRT Corporation makes collections on sales according to the following schedule:

50% in month of sale

45% in month following sale

5% in second month following sale

The following sales have been are expected:

	Expected Sales
April	$180,000
May	$190,000
June	$180,000

Budgeted cash collections in June should be budgeted to be:

$184,500

$180,000

$175,500

$180,900

Dilbert Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: o Sales are budgeted at $260,000 for November, $230,000 for December, and $210,000 for January. o Collections are expected to be 80% in the month of sale, 19% in the month following the sale, and 1% uncollectible. o The cost of goods sold is 65% of sales. o The company desires to have an ending merchandise inventory at the end of each month equal to 60% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. o Other monthly expenses to be paid in cash are $20,300. o Monthly depreciation is $20,000. o Ignore taxes.

Balance Sheet October 31
Assets
Cash	$27,000
Accounts receivable, net of allowance for uncollectible accounts	79,000
Merchandise inventory	101,400
Property, plant and equipment, net of $574,000 accumulated depreciation	1,082,000
Total assets	$1,289,400
Liabilities and Stockholders' Equity
Accounts payable	$169,000
Common stock	740,000
Retained earnings	380,400
Total liabilities and stockholders' equity	$1,289,400

The net income for December would be:

$40,200

$60,200

$55,800

$37,900

Carter Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow: o Sales are budgeted at $380,000 for November, $390,000 for December, and $400,000 for January. o Collections are expected to be 70% in the month of sale, 27% in the month following the sale, and 3% uncollectible. o The cost of goods sold is 65% of sales. o The company desires to have an ending merchandise inventory equal to 80% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase. o Other monthly expenses to be paid in cash are $22,000. o Monthly depreciation is $20,000. o Ignore taxes.

Balance Sheet October 31
Assets
Cash	$13,000
Accounts receivable, net of allowance for uncollectible accounts	77,000
Inventory	197,600
Property, plant and equipment, net of $502,000 accumulated depreciation	992,000
Total assets	$1,279,600
Liabilities and Stockholders' Equity
Accounts payable	$240,000
Common stock	780,000
Retained earnings	259,600
Total liabilities and stockholders' equity	$1,279,600

Accounts payable at the end of December would be:

$208,000

$253,500

$258,700

$50,700

LFM Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 3.3 hours of direct labor at the rate of $29.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. The company plans to sell 36,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 580 and 160 units, respectively. Budgeted direct labor costs for June would be: (Do not round intermediate calculations.)

rev: 11_19_2015_QC_CS-32026

$3,405,006

$3,423,756

$3,442,506

$1,036,500