1. The LaGrange Corporation had the following budgeted sales for the first half of the current year:

	Cash Sales	Credit Sales
January	$60,000	$160,000
February	$65,000	$180,000
March	$28,000	$140,000
April	$23,000	$108,000
May	$33,000	$210,000
June	$90,000	$20,000

The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled:

Collections on sales:

50% in month of sale

40% in month following sale

10% in second month following sale

The accounts receivable balance on January 1 of the current year was $65,000, of which $48,000 represents uncollected December sales and $17,000 represents uncollected November sales.

The total cash collected during January by LaGrange Corporation would be:

2) Davis Corporation is preparing its Manufacturing Overhead Budget for the fourth quarter of the year. The budgeted variable manufacturing overhead rate is $1.70 per direct labor-hour; the budgeted fixed manufacturing overhead is $116,000 per month, of which $30,000 is factory depreciation.

If the budgeted direct labor time for November is 7,000 hours, then the total budgeted cash disbursements for manufacturing overhead for November must be:

3) Paradise Corporation budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for next year.

	Beginning Inventory	Ending Inventory
Raw material*	56,000	66,000
Finished goods	96,000	66,000

* Three pounds of raw material are needed to produce each unit of finished product.

If Paradise Corporation plans to sell 560,000 units during next year, the number of units it would have to manufacture during the year would be:

4)Wasilko Corporation produces and sells one product.

1. The budgeted selling price per unit is $114. Budgeted unit sales for February is 9,900 units.
2. Each unit of finished goods requires 6 pounds of raw materials. The raw materials cost $4.00 per pound.
3. The direct labor wage rate is $24.00 per hour. Each unit of finished goods requires 2.4 direct labor-hours.
4. Manufacturing overhead is entirely variable and is $9.00 per direct labor-hour.
5. The variable selling and administrative expense per unit sold is $1.60. The fixed selling and administrative expense per month is $70,000.

The estimated net operating income (loss) for February is closest to:

5)The manufacturing overhead budget at Franklyn Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,200 direct labor-hours will be required in January. The variable overhead rate is $9 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,040 per month, which includes depreciation of $3,720. All other fixed manufacturing overhead costs represent current cash flows. The January cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

6)Roberts Enterprises has budgeted sales in units for the next five months as follows:

June	4,500	units
July	7,100	units
August	5,300	units
September	6,700	units
October	3,700	units

Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on May 31 contained 450 units. The company needs to prepare a production budget for the second quarter of the year.

The total number of units to be produced in July is:

7)Seventy percent of Pitkin Corporation's sales are collected in the month of sale, 20% in the month following sale, and 10% in the second month following sale. The following are budgeted sales data for the company:

	January	February	March	April
Budgeted sales	$200,000	$300,000	$350,000	$250,000

Total budgeted cash collections in April would be:

8)Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:

• Sales are budgeted at $350,000 for November, $330,000 for December, and $320,000 for January.
• Collections are expected to be 45% in the month of sale and 55% in the month following the sale.
• The cost of goods sold is 75% of sales.
• The company would like to maintain ending merchandise inventories equal to 80% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
• Other monthly expenses to be paid in cash are $24,100.
• Monthly depreciation is $15,100.
• Ignore taxes.

Balance Sheet
October 31
Assets
Cash	$ 20,100
Accounts receivable	70,100
Merchandise inventory	210,000
Property, plant and equipment, net of $572,100 accumulated depreciation	1,094,100
Total assets	$ 1,394,300
Liabilities and Stockholders' Equity
Accounts payable	$ 254,100
Common stock	820,100
Retained earnings	320,100
Total liabilities and stockholders' equity	$ 1,394,300

Expected cash collections in December are:

9)Sleeter Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations:

1. Budgeted unit sales for April, May, June, and July are 7,500, 11,900, 10,800, and 14,800 units, respectively. All sales are on credit.
2. The ending finished goods inventory equals 30% of the following month's sales.
3. The ending raw materials inventory equals 30% of the following months raw materials production needs. Each unit of finished goods requires 6 pounds of raw materials. The raw materials cost $5.00 per pound.

If 72,000 pounds of raw materials are required for production in June, then the budgeted cost of raw material purchases for May is closest to:

10)Which of the following budgets are prepared before the sales budget?

	Budgeted Income Statement	Direct Labor Budget
A)	Yes	Yes
B)	Yes	No
C)	No	Yes
D)	No	No