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Garcia Corporation forecasts sales of 6,200 units in April and 7,700 units in May. Beginning inventory on April 1 is 2,200 units, and the company

Garcia Corporation forecasts sales of 6,200 units in April and 7,700 units in May. Beginning inventory on April 1 is 2,200 units, and the company wants to have 20% of next months sales in inventory at the end of each month. Budgeted purchases in April would be:

  • 6,200 units.

  • 8,400 units.

  • 5,540 units.

  • 7,740 units.

  • Some other amount. Southland Company is preparing a cash budget for August. The company has $17,000 cash at the beginning of August and anticipates $120,800 in cash receipts and $134,500 in cash payments during August. Southland Company wants to maintain a minimum cash balance of $10,000. To maintain the minimum cash balance of $10,000, the company must borrow:

  • $0.

  • $10,000.

  • $6,700.

  • $7,000.

  • $27,700.

A companys flexible budget for 12,000 units of production showed sales, $48,000; variable costs, $18,000; and fixed costs, $16,000. The income expected if the company produces and sells 16,000 units is:

  • $2,667.

  • $14,000.

  • $18,667.

  • $24,000.

  • $35,000.

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