QUESTION 21

The balance of A/P is $100 and will be paid off entirely in May. In May, June, and July payments to suppliers for raw materials are $200, $250, and $300 respectively. The company pays half of all purchases in the month of purchase and half the following month. What will be paid in May and June for the purchase of raw materials?

$100 in May and $125 in June

$100 in May and $225 in June

$150 in May and $275 in June

$200 in May and $225 in June

$300 in May and $250 in June

QUESTION 22

The Selling and Admin Budget has the following items:

Sales Salaries	$100
Office Salaries	$100
Rent Expense	$ 80
Advertising Expense	$ 20
Depreciation Expense	$ 10
	$310

The amount that should be forwarded from the Selling and Admin Budget to the Cash Budget is:

$310

$300 because depreciation is a non-cash expense

$110 because salaries are considered direct labor

$230 because rent expense is part of the production budget

a few bucks

QUESTION 23

Budgeted sales units for Jan, Feb, Mar, and Apr are 20, 22, 24, 22 respectively. The beginning balance of Finished Goods Inventory on Jan 1 is 8. Desired ending Inventory is 50% of next month's level of sales. What is the budgeted/planned units produced for Feb and March?

23 in both Feb and Mar

25 in both Feb and Mar

26 in both Feb and Mar

25 in Feb and 24 in Mar

34 in Feb and 35 in Mar

Budgeted sales units for Jan, Feb, Mar, and Apr are 20, 22, 24, 22 respectively. The ending balance of Finished Goods Inventory on Dec 31 of the previous year is 9. Desired ending Inventory is 50% of next month's level of sales. A quarterly budget is prepared. What are the beginning and ending inventory figures for Quarter 1?

Beginning Inventory is 32, Ending Inventory is 34

Beginning Inventory is 34, Ending Inventory is 32

Beginning Inventory is 68, Ending Inventory is 60

Beginning Inventory is 9, Ending Inventory is 11

Beginning Inventory is 12, Ending Inventory is 11

QUESTION 25

The planned production units for Q1, Q2, Q3 are 50, 55, 60 respectively. Each completed unit requires 2 cartons of direct material. How much direct material is required for Q3?

60 cartons

120 cartons

165 cartons

330 cartons

none of the above

QUESTION 26

Beginning Raw Materials Inventory = 50 Units of Production planned for current period and next period = 10, 12, respectively Amount of Raw Material Needed for each completed unit = 20 lbs. Ending Inventory needs = 50% of next month's raw material requirements. Raw Material Cost + $3/lb

What is the budgeted direct materials for the current period?

$468

$600

$750

$810

none of the above

QUESTION 27

Which of the following would most likely not belong on a cash budget?

Total sales for the period

Cash payments made for raw materials

Expenditures for Labor

Expenditures for Overhead

Interest paid on money borrowed

QUESTION 28

The Overhead Budget contains

the costs of production.

fixed and variable expenses.

cash and perhaps non-cash expenses.

indirect costs.

all of the above.

QUESTION 29

The Direct Labor Budget contains all of the following except:

the budgeted units of sales for each period.

the budgeted units of production for each period.

the expected hours of direct labor.

the budgeted cost per hour of direct labor.

There are no exceptions. All of the above are included on the Direct Labor Budget.

QUESTION 30

For the cash budget, company policy dictates that the cash balance never dip below $7000. That means there should always be a surplus of $7000 on hand. If cash dips below $7000, a line of credit with a lender has been established for immediate borrowing. In Q1 before any borrowing for that quarter, there exists a deficit of $1000. In Q2 before any borrowing for that quarter there exists a surplus of $1000. What are the borrowing requirements, if any, for Q1 and Q2. Any interest would be accrued and paid after Q2, therefore interest is not a factor.

	Q1 borrow $8000, Q2 no need to borrow
	Q1 borrow $8000, Q2 borrow $6000
	Q1 borrow $8000, Q2 borrow $7000
	Q1 borrow $8000, Q2 borrow $7000
	Q1 borrow $7000, Q2 borrow $7000