Nicely Wyn Corporation has the following budgeted production for four months:

April 50,000

May 40,000

June 45,000

July 60,000

Each unit of product requires 2 pieces of raw materials. The desired ending raw materials inventory for each month

is 130% of the following month's production needs, plus 2,000 pieces. (The April 1 inventory meets this

requirement.)

The product is processed in two departments (Dept. A and Dept. B) and the direct labor standards are as follows:

Hours per Unit Rate per Hour Labor Cost per Unit

Department A 6 P30 P180

Department B 2 40 80

11. What is the budgeted direct labor cost for the month of May

a. P13,000,000 b. P11,700,000 c. P10,400,000 d. P7,200,000

Factory Overhead Budget

12. Fame Company has the following budget formula for factory overhead costs:

FOH = P5,000,000 per month + P300 per unit of product

If the company plans to produce 50,000 units in January, how much is the budgeted factory overhead cost?

a. P20,000,000 b. P15,000,000 c. P5,000,000 d. P5,050,300

13. Amor Powers Company is preparing a flexible budget for 2014 and the following maximum capacity estimates for

Department M are available:

At maximum capacity

Direct labor hours 60,000

Variable factory overhead 150,000

Fixed factory overhead P240,000

Assume that Amor's normal capacity is 80% of maximum capacity. What would be the total factory overhead rate,

based on direct labor-hours, in a flexible budget at normal capacity?

a. P6.00 b. P6.50 c. P7.50 d. P8.13

14. Pangasinan Corporation's master budget shows straight-line depreciation machinery of P516,000 based on an

annual production volume of 103,200 units of product. In July, it produced 8,170 units of product, and the

accounts had the actual depreciation on machinery of P41,000. It controls manufacturing cots with a flexible

budget. The flexible budget amount for depreciation on machinery for July is

a. P38,950 b. P43,000 c. P41,000 d. P40,850

Operating Expense Budget

Questions 15 and 18 are based on the following information:

The International Company makes and sells only one product, Product SW. The company is in the process of preparing

its Selling and Administrative Expense Budget for the last half of the year. The following budget data are available:

VC/unit sold FC/month

Sales commissions P0.70

Shipping 1.10

Advertising 0.20 P14,000

Executive salaries - 34,000

Depreciation on office equipment- - 11,000

Other 0.25 19,000

15. All expenses other than depreciation are paid in cash in the month they are incurred. If the company has budgeted

to sell 25,000 units of Product SW in July, then the total budgeted selling and administrative expenses for July will

be:

a. P56,250 b. P134,250 c. P78,000 d. P123,250

16. If the company has budgeted to sell 20,000 units of Product SW in October then the total budgeted variable selling

and administrative expenses for October will be:

a. P45,000 b. P56,250 c. P40,000 d. P78,000

17. If the budgeted cash disbursements for selling and administrative expenses for November total P123,250, then

how many units of Product SW does the company plan to sell in November (rounded to the nearest whole unit)?

a. 33,444 units b. 22,952 units c. 25,000 units d. 20,111 units

18. If the company has budgeted to sell 24,000 units of Product SW in September, then the total budgeted fixed selling

and administrative expenses for September would be:

a. P54,000 b. P67,000 c. P48,000 d. P78,000