5. The manufacturing overhead budget at Pendley Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7,400 direct labor-hours will be required in August. The variable overhead rate is $7.60 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $149,480 per month, which includes depreciation of $24,900. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for August should be:

a. $27.80

b. $24.30

c. $7.60

d. $20.20

6. Vandel Inc. bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 3,500 units are planned to be sold in April. The variable selling and administrative expense is $4.00 per unit. The budgeted fixed selling and administrative expense is $35,850 per month, which includes depreciation of $5,000 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the April selling and administrative expense budget should be:

a. 49,850

b. 44,850

c. 30,850

d. 14,000

8. Sarter Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.

	Beginning Inventory	Ending Inventory
Finished goods (units)	20,000	70,000
Raw material (grams)	50,000	40,000

Each unit of finished goods requires 2 grams of raw material.

The company plans to sell 550,000 units during the year, how much of the raw material should the company purchase during the year?

a. 1,240,000 grams

b. 1,210,000 grams

c. 1,190,000 grams

d. 1,200,000 grams