1.

Shown below is the sales forecast for Cooper Inc. for the first four months of the coming year.

On average, 50% of credit sales are paid for in the month of the sale, 30% in the month following sale, and the remainder are paid two months after the month of the sale. Assuming there are no bad debts, the expected cash inflow in March is:

A.	$138,000
B.	$122,000
C.	$119,000
D.	$108,000

2.

The following data have been taken from the budget reports of Brandon company, a merchandising company.

Forty percent of purchases are paid for in cash at the time of purchase, and 30% are paid for in each of the next two months. Purchases for the previous November and December were $150,000 per month. Employee wages are 10% of sales for the month in which the sales occur. Selling and administrative expenses are 20% of the following month's sales. (July sales are budgeted to be $220,000.) Interest payments of $20,000 are paid quarterly in January and April. Brandon's cash disbursements for the month of April would be:

A.	$140,000
B.	$254,000
C.	$200,000
D.	$248,000

3.

Walsh Company expects sales of Product W to be 60,000 units in April, 75,000 units in May and 70,000 units in June. The company desires that the inventory on hand at the end of each month be equal to 40% of the next month's expected unit sales. Due to excessive production during March, on March 31 there were 25,000 units of Product W in the ending inventory. Given this information, Walsh Company's production of Product W for the month of April should be:

A.	60,000 units
B.	65,000 units
C.	75,000 units
D.	66,000 units

4.

Berol Company plans to sell 200,000 units of finished product in July and anticipates a growth rate in sales of 5% per month. The desired monthly ending inventory in units of finished product is 80% of the next month's estimated sales. There are 150,000 finished units in inventory on June 30. Berol Company's production requirement in units of finished product for the three-month period ending September 30 is:

A.	712,025 units
B.	630,500 units
C.	664,000 units
D.	665,720 units

5.

Prestwich Company has budgeted production for next year as follows:

Two pounds of material A are required for each unit produced. The company has a policy of maintaining a stock of material A on hand at the end of each quarter equal to 25% of the next quarter's production needs for material A. A total of 30,000 pounds of material A are on hand to start the year. Budgeted purchases of material A for the second quarter would be:

A.	82,500 pounds
B.	165,000 pounds
C.	200,000 pounds
D.	205,000 pounds

6.

The manufacturing overhead budget at Cutchin Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,800 direct labor-hours will be required in September. The variable overhead rate is $7.00 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,120 per month, which includes depreciation of $3,640. All other fixed manufacturing overhead costs represent current cash flows. The September cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

A.	$59,080
B.	$62,720
C.	$19,600
D.	$39,480

7.

A static budget:

A.	should be compared to actual costs to assess how well costs were controlled.
B.	should be compared to a flexible budget to assess how well costs were controlled.
C.	is valid for only one level of activity.
D.	represents the best way to set spending targets for managers.

8.

When computing standard cost variances, the difference between actual and standard price multiplied by actual quantity yields a(n):

A.	combined price and quantity variance.
B.	efficiency variance.
C.	price variance.
D.	quantity variance.

9.

The purchasing agent of the Clampett Company ordered materials of lower quality in an effort to economize on price and in response to the demands of the production manager due to a mistake in production scheduling. The materials were shipped by airfreight at a rate higher than that ordinarily charged for shipment by truck, resulting in an unfavorable materials price variance. The lower quality material proved to be unsuitable on the production line and resulted in excessive waste. In this situation, who should be held responsible for the materials price and quantity variances?

A.	Option: A
B.	Option: B
C.	Option: C
D.	Option: D

10.

Tower Company planned to produce 3,000 units of its single product, Titactium, during November. The standards for one unit of Titactium specify six pounds of materials at $0.30 per pound. Actual production in November was 3,100 units of Titactium. There was an unfavorable materials price variance of $380 and a favorable materials quantity variance of $120. Based on these variances, one could conclude that:

A.	more materials were purchased than were used.
B.	more materials were used than were purchased.
C.	the actual cost per pound for materials was less than the standard cost per pound.
D.	the actual usage of materials was less than the standard allowed.