6. Question 5: Master Budgeting

Time: 35 minutes

Total: 20 marks

Camera Crawlers manufactures picture frames. Sales for December are expected to be 10,000 units of various sizes. Historically, the average frame requires four metres of framing, two square metre of glass, and four square metres of backing. Beginning inventory includes 1200 metre of framing, 800 square metres of glass, and 600 square metres of backing. Current prices are $1.00 per metre of framing, $5.00 per square metre of glass, and $3.00 per square metre of backing. Ending inventory should be 150% of beginning inventory. Purchases are paid for in the month acquired.

5

Required:

a. Determine the quantity of framing, glass, and backing that is to be purchased during December.(10 marks)

b. Determine the total costs of direct materials for December purchases.

(10 marks)

7. Question 6: Master Budgeting

Time: 30 minutes

Total: 12 marks

Magna Corporation has prepared the following sales budget:

Month

Cash Sales

Credit Sales

Jan

$16,000

$68,000

Feb

20,000

80,000

March

20,000

74,000

April

26,000

92,000

May

24,000

76,000

Collections are 30% in the month of sale, 50% in the month following the sale, and 10% two months following the sale. The remaining 10% is expected to be uncollectible.

Required:

Prepare a schedule of cash collections for March through May.

6 Question 5: Master Budgeting Time: 35 minutes Total: 20 marks Camera Crawlers manufactures picture frames. Sales for December are expected to be 10,000 units of various sizes. Historically, the average frame requires four metres of framing, two square metre of glass, and four square metres of backing. Beginning inventory includes 1200 metre of framing, 800 square metres of glass, and 600 square metres of backing. Current prices are $1.00 per metre of framing, $5.00 per square metre of glass, and $3.00 per square metre of backing. Ending inventory should be 150% of beginning inventory. Purchases are paid for in the month acquired. 5 Required: a. Determine the quantity of framing, glass, and backing that is to be purchased during December (10 marks) b. Determine the total costs of direct materials for December purchases. (10 marks) Question 6: Master Budgeting Time: 30 minutes Total: 12 marks Magna Corporation has prepared the following sales budget: Month Cash Sales Credit Sales plan 16.000 $68,000 Feb 20.000 0.000 March 20,000 174,000 April 26,000 192,000 May 24.000 176,000 Collections are 30% in the month of sale, 50% in the month following the sale, and 10% two months following the sale. The remaining 10% is expected to be uncollectible. Required: Prepare a schedule of cash collections for March through May