Short-term Budgeting

6. Sunshine Industries' sales budget shows quarterly sales for the next year as follows: Quarter Sales (units) First 10,000 Second 8,000 Third 12,000 Fourth 14,000 Company policy is to have a finished goods inventory at the end of each quarter equal to 20% of the next quarter's sales. Budgeted production for the second quarter should be: A. 8.800 units C. 7,200 units. B. 8,400 units. D. 8,000 units.* 7. The Nestor Company has budgeted production for next year as follows: Quarter First Second Third Fourth Production in units 10,000 12,000 16,000 14.000 Four pounds of raw materials are required for each unit produced. Raw materials on hand at the start of the year total 4,000 lbs. The raw materials inventory at the end of each quarter should equal 10% of the next quarter's production needs. Budgeted purchases of raw materials in the third quarter would be: A. 62,400 lbs. C. 63,200 lbs. B. 50,400 lbs. D. 56,800 lbs.*8. Wellfleet Company manufactures children's' recreational equipment. The Purchasing Department is finalizing plans for next year and has gathered the following information regarding two of the components used in both tricycles and bicycles: Part A19 Part B12 Tricycles Bicycles Beg inventory 3,500 1,200 800 2, 150 Ending inventory 2,000 1,800 1,000 900 Unit cost P1.20 P4.50 P54.50 P89.60 Projected unit sales 96,000 130,000 Component usage: Tricycles 2 per unit 1 per unit Bicycles 2 per unit 4 per unit The budgeted peso value of Wellfleet Company's purchases of Part A19 for next year is: A. P383 580 C. P540,600 B. P538,060 D. P480,000* 9. Items from Sap Company's budget for March in which 2,100 units were produced and sold appear below Direct materials P12,000 indirect materials - variable 2,000 Supervisor salaries 10,000 Depreciation on factory equipment 8,000 Direct labor 7,000 Property taxes on factory 3,000 Total P42.900 At 2,200 units, how much are budgeted variable manufacturing costs? A. P43 000 C. P22,000 B. P19,005 D. P21,000* 10. Harrah Company provided the following information for the month of October: Beginning cash balance P 35,000 Cash receipts 460.000 Cash disbursements 485,000 Harrah's policy is to keep a minimum end of the month cash balance of P30,000. How much will Harrah's need to borrow during August? A. P25,000 C. P20,000 8 PO D. P10,000