1. Thorne Chemicals makes a cleaning solution. The following information is available on March 1, 2014:

Raw Materials needed to make 1 gallon of cleaning solution: 4 units of X and 3 units of Y.

Amounts on hand as of March 1: Raw Material X has 22 units Raw Material Y has 26 units. There are 63 gallons of Cleaning Solution on hand as of March 1.

Expected sales of cleaning solution during March is 160 gallons.

Desired levels of ending inventory: Raw Material X, 30 units; Raw Material Y, 24 units. Of the cleaning solution, 45 gallons is the desired ending finished goods inventory level.

Cost of Raw materials: Raw Material X costs $2 per unit Raw Material Y costs $5 per unit.

Given this information, the Direct Materials Purchases Budget for both raw materials for March is:

a. $3,272 b. $3,686 c. $ 994 d. $1,120

2. Playtime Toys began operations on January 1. During January it produced 2,000 toys and sold 1,850 toys. The following are needed to make 1 toy:

Wood: 2 board feet at $3 per foot

Paint: 1.5 quarts at $2 per quart

Direct Labor: 3 hours at $6 per hour

Manufacturing overhead is applied at a rate of $4 per direct labor hour.

Given this information, ending finished goods inventory would be:

a. $4,050 b. $4,650 c. $5,250 d. $5,850

3. Kidder Company began its operations on March 31st of the current year. Budgeted operating expenses for the first three months of operations follow:

April $156,800

May $195,200

June $217,600

Depreciation of $6,000, property taxes of $17,000 and insurance of $5,800 are included in each month's operating expenses above. Property taxes will be paid in August and insurance was paid in March. All other operating expenses are paid 75% in the month incurred and the remainder paid in the following month. The cash payments for operating expenses in May are budgeted to be ________.

a. $156,800 b. $200,800 c. $172,000 d. $185,600

4. PJ Lynn Company plans to sell 100,000 units in March and 140,000 units in April. PJ Lynn