17. Taylor Company, a manufacturer of snowmobiles, is operating at 60% of plant capacity. Taylors plant manager is considering making headlights instead of purchasing them from an outside supplier for $11 each. The Taylor plant has idle equipment that could be used to manufacture the headlights. The design engineer estimates that each headlight requires $4.00 of direct materials, $3.00 of direct labor and $6.00 of manufacturing overhead. Forty percent of the manufacturing overhead is a fixed cost that would not be affected by this decision. Taylor Companys decision to manufacture the headlights should result in a net gain (loss) of what amount for each headlight? A. ($2.00) B. $1.60 C. $0.40 D. $2.80

8. Which of the following is true regarding sales forecasts? A. Sales forecasts cannot be developed until the cash budget has been prepared because the marketing department will not know what funds are available for advertising. B. Sales forecasts cannot be developed until the production budget has been prepared because the production department must determine how many items need to be manufactured. C. Various elements of the master budget ultimately rely on sales forecasts. D. Sales forecasts ultimately rely on various elements of the master budget.

Use the following information to answer questions 14 and 15. Unakalamba, Inc. is developing its cash budget for November. The budgeted beginning cash balance is $60,000. Budgeted cash receipts total $140,000 and budgeted cash disbursements total $160,000. Company policy requires Unakalamba, Inc. to maintain a minimum cash balance of $50,000.

14. What will be the excess or deficiency of cash available versus cash disbursements for November? A. $10,000 excess B. $10,000 deficiency C. $20,000 deficiency D. $40,000 excess

15. What amount of funds should Unakalamba, Inc. plan to borrow or repay during November? A. Borrow $0 B. Repay $40,000 C. Borrow $10,000 D. Borrow $40,000