30. Mounce, Inc. produces and sells free-standing quilt frames. In budgeting for production needs, the company requires that 10% of the next month's sales be on hand at the end of each month. Budgeted sales of quilt frames over the next four months are: Budgeted unit sales September 25,000 October 32,000 November 56,000 December 48,000 Budgeted production for October is a. 26,650. b. 34,400. c. 35,100. d. 37,600. 31. Phillip Co. manufactures decorative pillows designed for use on outdoor patios. Phillip requires that 30 percent of next month's sales be on hand at the end of each month. The following information is available regarding budgeted sales of pillows: February March April May Budgeted unit sales 25,000 22,000 30,000 44,000 60,000 What is budgeted production for May? a. 44,000 b. 48,800 c. 62,000 d. 30,800 32. Which of the following is not a component of the cash budget? a. Cash available to spend b. Short-term financing c. Reconciliation of beginning and ending cash d. Cash disbursements 33. Morgan Manufacturing is preparing its cash budget for the second quarter. The inventory manager has provided the following amounts budgeted for materials purchases: April $62,880 May 44,960 June 47,360 The controller reports that Morgan pays for 20% of its purchases in the month of purchase, 60% in the month following purchase, and 20% in the second month after purchase. What are Morgan's budgeted cash payments for purchases in June? a. $39,552 b. $49,024 C. $89,912 d. $9,472 34. London Manufacturing Company expects the following sales in January, February, and March: January February March Cash Sales $60,000 $50,000 $75,000 Credit Sales $270,000 $240,000 $355,000 The controller has determined that the company collects credit sales as follows: 60% in the month of sale, 30% in the first month after sale, 5% in the second month after sale, and 5% is expected to be uncollectible. How much cash will be collected from customers in March? a. $291,500 b. $376,500 c. $373,500 d. $410,000 35. On a pro-forma balance sheet, the cash balance comes directly from a. the cash receipts budget. b. the general ledger. C. the cash budget. d. the bank statement. 36. Julie Finn is preparing the materials purchases budget for the first quarter. The production manager has provided the following production budget information: January - 60,000 units, February - 55,000 units, March - 50,000 units. Each unit requires 5 gallons of direct materials, ain an ending inventory equal to 15% of the next month's production needs. How many gallons will Julie budget to purchase in February? a. 271,250 b. 275,000 C. 282,500 d. 312,500 37. Barry Co. manufactures leather briefcases and carryalls. Barry's production manager has provided the following production budget. Each briefcase or carryall requires 1.2 yards of leather fabric and Barry maintains an ending inventory of leather fabric equal to 25% of the next month's production needs. February March April May June Budgeted production 50,000 44,000 60,000 64,000 58,000 If each yard of leather fabric costs $8.60, how much should Barry budget for purchases of fabric in April? a. $784,320 b. $629,520 C. $619,200 d. $524,600 38. The basic managerial functions that help managers ensure that enough cash is available to run the business is the function of a. planning b. controlling. C. evaluation. d. decision making. 39. If a company gets the sales forecast wrong, which of the following budgets will also be incorrect? a. Direct labor budget b. Production budget C. Budgeted income statement d. All of these answer choices are correct. 40. Copper, Inc.'s intern was preparing the cash budget for May. Copper's beginning inventory was $12,600 and its ending inventory was $12,000. If cost of goods sold is 55% of sales, what was the amount of budgeted monthly sales (if necessary, round your answer to the nearest dollar)? $ 1,800 151,800 153,600 Beginning cash balance Cash receipts Total cash available to spend Less disbursements: Merchandise purchases Selling and administrative expenses Total cash disbursements Cash excess (needed) Borrowing Ending cash balance 133,050 27,000 160,050 (6,450) 7,950 $ 1,500 a. $350,000 b. $243,000 C. $240,818 d. $73,508 41. Alexa Industries has the following amounts budgeted for selling and administrative expenses for February Advertising $78,600 Rent 56,200 Office equipment depreciation 14,800 Bad debts 6,400 Supplies 13,200 What amount will Alexa report on its February pro-forma income statement for selling and administrative expenses? a $154,400 b. $169,200 C. $148,000 d. $156,000