Question
1. Shuck Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 8,200 direct labor-hours will be required in
1. Shuck Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 8,200 direct labor-hours will be required in May. The variable overhead rate is $1.30 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $100,330 per month, which includes depreciation of $9,020. All other fixed manufacturing overhead costs represent current cash flows. The May cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
a. $110,990
b. $10,660
c. $91,310
d. $101,970
2. The manufacturing overhead budget at Latronica Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7,100 direct labor-hours will be required in August. The variable overhead rate is $8.80 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $132,770 per month, which includes depreciation of $24,870. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for August should be:
a. $24.00
b. $27.50
c. $8.80
d. $18.70
3. Sartain 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) | 30,000 | 80,000 |
Raw material (grams) | 60,000 | 50,000 |
Each unit of finished goods requires 3 grams of raw material. |
If the company plans to sell 770,000 units during the year, the number of units it would have to manufacture during the year would be:
a. 820,000 units
b. 770,000 units
c. 710,000 units
d. 850,000 units
4. Walsh Company expects sales of Product W to be 59,000 units in April, 79,000 units in May and 74,000 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 29,000 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. 79,000 units
b. 67,840 units
c. 61,600 units
d. 59,000 units
5. Sartain 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) | 24,000 | 74,000 |
Raw material (grams) | 54,000 | 44,000 |
Each unit of finished goods requires 2 grams of raw material. |
If the company plans to sell 590,000 units during the year, how much of the raw material should the company purchase during the year?
a. 1,294,000 grams
b. 1,280,000 grams
c. 1,324,000 grams
d. 1,270,000 grams
6. LHU Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.7 hours of direct labor at the rate of $23.00 per direct labor-hour. The company plans to sell 46,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 580 and 140 units, respectively. Budgeted direct labor costs for June would be: (Do not round intermediate calculations.)
a. $2,866,776
b. $1,050,500
c. $2,829,276
d. $2,848,026
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