Budgeting Inventories For each independent situation below, determine the missing amounts:

	A	B	C	D
Beginning inventory	7,500	Answer	6,000	Answer
Produced	15,000	27,000	Answer	70,000
Available	Answer	Answer	46,000	85,000
Sold	18,000	31,000	Answer	Answer
Ending inventory	Answer	3,000	5,000	11,000

Budget Preparation

Tuttle Company is preparing its master budget for November. Use the estimates provided to determine the necessary amounts for each of the following requirements. (Estimates may be related to more than one requirement.)

a. What should total sales revenue be if territories N and S estimate sales of 40,000 and 80,000 units, respectively, and the unit selling price is $20? $Answer

b. If the beginning finished goods inventory is an estimated 5,000 units and the desired ending inventory is 6,000 units, how many units should be produced? Answer units

c. What dollar amount of materials should be purchased at $2 per pound if each unit of product requires 3 pounds and beginning and ending materials inventories should be 10,000 and 12,000 pounds, respectively? $Answer

d. How much direct labor cost should be incurred if each unit produced requires 0.5 hours at an hourly rate of $14? $Answer

e. How much manufacturing overhead should be incurred if fixed manufacturing overhead is $32,000 and variable manufacturing overhead is $2 per direct labor hour? $Answer

Budgeting Cash Flow The following various elements relate to Murphy, Inc.s cash budget for October of the current year. For each item, determine the amount of cash that Murphy should receive or pay in October.

a. At $24 each, unit sales are 10,000 and 12,000 for September and October, respectively. Total sales are typically 30% for cash and 70% on credit; 40% of credit sales are collected in the month of sale, with the balance collected in the following month. Uncollectible accounts are negligible.

September sales	Answer
October cash sales	Answer
October credit sales	Answer
Cash collected in October	Answer

b. Merchandise purchases were $43,000 and $76,000 for September and October, respectively. Typically, 20% of total purchases are paid for in the month of purchase with a 5% cash discount. The balance of purchases is paid for (without discount) in the following month.

September purchases	Answer
October purchases	Answer
Cash paid in October	Answer

c. Fixed administrative expenses, which total $15,000 per month, are paid in the month incurred. Variable administrative expenses amount to 20% of total monthly sales revenue, 65% of which is paid in the month incurred, with the balance paid in the following month.

October fixed expenses	Answer
September variable expenses	Answer
October variables expenses	Answer
Cash paid in October	Answer

d. Fixed selling expenses, which total $4,200 per month, are paid in the month incurred. Variable selling expenses, which are 5% of total sales revenue, are paid in the month following their incurrence.

October fixed expenses	Answer
September variable expenses	Answer
Cash paid in October	Answer

Sales Budget

Hawaiian Style supplies island-inspired clothing to hotel gift shops, golf shops, and specialty boutiques throughout the Hawaiian islands. The clothing distributor purchases its inventory from a Chinese clothing manufacturer that uses the latest designs provided by Hawaiian Style.

Due to manufacturing lead times, Hawaiian Style must provide the final designs no later than 90 days before it receives the completed clothing. Due to the costs of retooling and the risks associated with consumers changing tastes for clothing styles and colors, the Chinese clothing manufacturer requires Hawaiian Style to order its clothing in large batches, effectively resulting in Hawaiian Style ordering its entire annual inventory at the beginning of each year.

Hawaiian Style attempts to balance its concerns about stockouts of popular styles with its concerns about excess inventory from season to season by carefully budgeting its purchases for the next fashion year. Based on its analysis, Hawaiian Style has developed the following probabilities for sales for the coming year:

Sales Level	Probability
$750,000	20%
900,000	30%
1,100,000	30%
1,250,000	15%
1,300,000	5%

What amount should Hawaiian Style budget for sales for the coming year?

$Answer