Coles Corporation, Inc. makes and sells a single product, Product R. Three yards of Material K are needed to make one unit of Product R. Budgeted production of Product R for the next five months is as follows:

August	14,000	units
September	14,500	units
October	15,500	units
November	12,600	units
December	11,900	units

The company wants to maintain monthly ending inventories of Material K equal to 20% of the following month's production needs. On July 31, this requirement was not met since only 2,500 yards of Material K were on hand. The cost of Material K is $0.85 per yard. The company wants to prepare a Direct Materials Purchase Budget for the rest of the year.

The total cost of Material K to be purchased in August is:

Multiple Choice

• $48,200

• $42,300

• $40,970

• $33,840

Which of the following budgets are prepared before the sales budget?

	Budgeted Income Statement	Direct Labor Budget
A)	Yes	Yes
B)	Yes	No
C)	No	Yes
D)	No	No

Multiple Choice

• Choice B

• Choice A

• Choice D

• Choice C

Sedita Inc. is working on its cash budget for July. The budgeted beginning cash balance is $21,000. Budgeted cash receipts total $193,000 and budgeted cash disbursements total $192,000. The desired ending cash balance is $37,000. The excess (deficiency) of cash available over disbursements for July will be:

Multiple Choice

• $20,000

• $214,000

• $1,000

• $22,000