1. Trevor 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, Trevor 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.

2. Bentonville Inc. bases its marketing and administrative expense budget on budgeted unit sales. The sales budget shows 3,200 units are planned to be sold in December. The variable marketing and administrative expense is $3.10 per unit. The budgeted fixed marketing and administrative expense is $60,800 per month, which includes depreciation of $6,720 per month. The remainder of the fixed marketing and administrative expense represents current cash flows. The cash disbursements for marketing and administrative expenses on the December marketing and administrative expense budget should be: a.) $70,720.

b.) $54,080.

c.) $64,000.

d.) $9,920.

3.The Colson Company has budgeted sales for the year as follows:

Quarter	1	2	3	4
Sales in units	12,000	14,000	18,000	16,000

The ending inventory of finished goods for each quarter should equal 25% of the next quarter's budgeted sales in units. The finished goods inventory at the start of the year is 3,000 units. Scheduled production for the second quarter is (in units):

a.) 17,500 units.

b.) 16,500 units.

c.) 15,000 units.

d.) 13,000 units.

4. Center Company makes collections on sales according to the following schedule:

30% in the month of sale

60% in the month following sale

8% in the second month following sale

The following sales are expected:

	Expected Sales
January	$	100,000
February	$	120,000
March	$	110,000

Cash collections in March should be budgeted to be:

a.) $110,000.

b.) $110,800.

c.) $105,000.

d.) $113,000.

5. Tennison Corporation had the following transactions in its first year of operations:

Sales (90% collected in year)	$	1,500,000
Bad debt write-offs		60,000
Disbursements for costs and expenses		1,200,000
Disbursements for income taxes		90,000
Purchases of fixed assets		400,000
Depreciation of fixed assets		80,000
Proceeds from issuance of common stock		500,000
Proceeds from short-term borrowings		100,000
Payments on short-tern borrowings		50,000

What is the cash balance at year end?

a.) $150,000.

b.) $170,000.

c.) $210,000.

d.) $280,000.

6. Page Company makes 30% of its sales for cash and 70% on account. 60% of the account sales are collected in the month of sale, 25% in the month following sale, and 12% in the second month following sale. The remainder is uncollectible. The following information has been gathered for Page's first year of operations:

Month	1	2	3	4
Total sales	$60,000	$70,000	$50,000	$30,000

Total cash receipts in Month 3 will be:

a.) $52,200.

b.) $53,290.

c.) $50,000.

d.) $51,510.