November 14, 2017 Accounting 2302Name Mini-Test-Chapter 8 (Choose the best answer for the following) 1. When calculating raw materials purchases, the starting point will be A actual materials purchases from the previous year B. budgeted finished goods inventory. C. budgeted production. E. beginning work in process inventory m's Pastries, Inc. manufactures donuts, which require 0.3 pounds of flour per unit. Jim's production budget for the next four months is as follows: July, 5,000 units; August, 7,000 units; September, 8,000 units; and October, 8 000 units. Themw materials flour ending inventory policy is 25% of the following month's production needs If August planned purchases are $17,400, then what is the approximate cost per pound of flour for August? A. $6.00 B. $7.40. C. $8.00 D. $8.40 E. None of the above. 3. Albertville Ine produces leather handbags. The production budget for the next four months is as follows: July 5,000 units, August 7,000 units, September 7,500 units, October 8,000 units. Each handbag requires 0.5 square meters of leather. Albertville Inc's leather inventory policy is 30% of next month's production needs. Leather is expected to cost $5.00 per square meter in June, but increases by 20% in July, what is the expecte cost of leather purchases in July? A. $14,600. B. $15,800. C. $16,200. D. $16.800. E. $18,600. /4. (Tor F) Changes in the sales budget will require changes in the raw matenals inventory budget TofF) _Production requirements for raw materials may possibly exceed purchases of raw mate