1.It has been estimated that there is a 2 out of 10 chance that sales would be equal to 4,000 units, 3 out of 10 for

10,000 units, 4 out of 10 for 14,000 units and 1 out of 10 for 20,000 units. What must be the expected value of the

foregoing sales estimates

a. 14,100 b.13,000 c.11,400 d.11,040

2.The sales estimate for the coming year, 2016 is 20,000 units at P5 per unit. What is the sales budget for the 1 st

quarter in peso for Ariel Corporation considering that sales (in units) for the past three years were as follows:

2013 2014 2015

First quarter 540 770 800

Second quarter 960 980 1,200

Third quarter 1,980 2,660 2,720

Fourth quarter 2,520 2,590 3,280

a. P39,950 b. P35,050 c. P14,950 d. P10,050

3.Patay-Buhay Corporation produces push-button switches used in the manufacture of electric fans. For the year 200B,

the sales of electric fans have been forecasted at 800,000 units. Each unit of electric fans requires 4 pieces of push-

button switches. Patay-Buhay regularly supplies 60% of the push-button switches used in the production of new

electric fans.

In addition, a replacement parts market also exists. Over the past 5 years, the sales of the replacement push-button

switches have increased per year by 20% of the preceding year's sales. In 200A, Patay-Buhay sold 150,000 pieces of

push-button replacement switches. The trend is expected to continue in 200B.

The company sells the push-button switches for P10 per piece in both markets.

The budgeted sales revenue based on the expected number of pieces of push-button switches to be sold in 200B is

a. P19,200,000 b. P20,700,000 c. P21,000,000 d. P2,100,000

4.The Sales Department of SMARTS Company has been in the business of selling toy batteries which has a total

market of 20,000,000 last 2014. It served 20% of the total market last year and in the coming year it expects the

following total market based on various economic forecasts is as follows:

Economy Probability Estimated total market

Rechargeable Non-rechargeable

Excellent 50% 100,000 30,000,000

Good 40% 78,000 23,000,000

Fair 10% 54,000 17,000,000

5.Hershey Company has budgeted sales of 90,000 units in January; 120,000 units in February; and 180,000 units in

March. The company has 20,000 units on hand on January 1. If Hershey Company requires an ending inventory of

finished goods equal to 20% of the following month's sales, the budgeted production during February should be

a. 96,000 b.108,000 c.120,000 d.132,000

6.Following is the sales budget of BULAKLAK Company for the period January to June 2014:

Months Units

January 100,000

February 90,000

March 90,000

April 80,000

May 70,000

June 70,000

The company's projection is to have inventory on hand at the end of each month equal to 70% of the sales for the

month following. It is assumed that the inventory at the end of December 2013 will meet this requirement. It is also

estimated that the 80,000 units will be sold in July 2014. What is the total production budget in units for the six

months period ending June 30, 2014?

a. 556,000 b. 486,000 c. 524,000 d.479,000

7,Palawan Company is budgeting sales of 42,000 units of product Y for March 2014. To make one unit of finished

product, three pounds of raw material A are required. Actual beginning and desired ending inventories or raw

material A and product Y are as follows:

March 1, 2014 March 31, 2014

Raw material A 100,000 lbs. 110,000 lbs.

Product Y 22,000 units 24,000 units

There is no work-in-process inventory for product Y at the beginning and end of March. For the month of March,

how many pounds of raw material A is Palawan planning to purchase?

a. 126,000 b.132,000 c. 136,000 d.142,000

8.Tasyo Company has budgeted sales of 90,000 units in January; 120,000 units in February; and 180,000 in March.

The company has 20,000 units of finished goods and 35,000 pieces of materials on hand on January 1. Each unit of

product requires 5 pieces of materials. The desired inventory of finished goods and materials at the end of each

month is as follows:

Finished goods -------- 20% of next month's sales

Materials -------- 25% of next month's production needs

How many pieces of materials should the company plan to purchase in January?

a. 600,000 b.567,000 c. 468,000 d.552,500

9.Each unit of product Mindoro takes five direct labor hours to make. Quality standards are high and 8% of units

produced are normally rejected due to substandard quality. Next month budgets are as follows:

Beginning inventory of FG 3,000 units

Planned ending inventory of FG 7,600 units

Budgeted sales of Mindoro 36,800 units

All stocks of finished goods must have successfully passed the quality control check. What is the direct labor budget

for the month?

a. 198,720 hours b.200,000 hours c. 223,560 hours d.225,000 hours

Items 10 and 11 are based on the following information:

Nicely Wyn Corporation has the following budgeted production for four months:

April 50,000

May 40,000

June 45,000

July 60,000

Each unit of product requires 2 pieces of raw materials. The desired ending raw materials inventory for each month

is 130% of the following month's production needs, plus 2,000 pieces. (The April 1 inventory meets this

requirement.)

The product is processed in two departments (Dept. A and Dept. B) and the direct labor standards are as follows:

Hours per Unit Rate per Hour Labor Cost per Unit

Department A 6 P30 P180

Department B 2 40 80

10. What is the budgeted purchases of raw materials in June?

a. 51,000 b. 84,000 c.120,000 d.129,000

11. What is the budgeted direct labor cost for the month of May

a. P13,000,000 b. P11,700,000 c. P10,400,000 d. P7,200,000