The Year 1 selling expense budget for Pear Corporation is as follows:

Budgeted sales

$275,000

Selling costs:

Delivery expenses

$2,750

Commission expenses

5,500

Advertising expenses

2,500

Office expenses

1,500

Miscellaneous expenses

5,300

Total

$17,550

Delivery and commission expenses vary proportionally with budgeted sales in dollars.Advertising and office expenses are fixed.Miscellaneous expenses include $2,000 of fixed costs.The rest varies with budgeted sales in dollars.The budgeted sales for Year 2 are $330,000.

What will be the value of miscellaneous expenses in the Year 2 selling expense budget?

A)$6,200

B)$4,200

C)$5,960

D)$3,600

47. The Fred Fisher Corporation has a sales budget for next month of $200,000. Cost of goods sold is expected to be $125,000.All goods are paid for in the month following their purchase.The beginning inventory of merchandise is $8,000, and an ending inventory of $6,000 is desired.Beginning accounts payable is $26,000.

How much merchandise inventory will The Fred Fisher Corporation need to purchase next month?

A)$123,000

B)$190,000

C)$246,000

D)$400,000

48. Happy Manufacturing Company needs to know its anticipated cash inflows for the next quarter by month.Cash sales are 25 percent of total sales each month.Historically, sales on account have been collected as follows:50 percent in the month of the sale, 30 percent in the month after the sale, and the remaining 20 percent two months after the sale.

Gross sales for the quarter are projected as follows:

January

$20,000

February

$10,000

March

$40,000

Accounts receivable on December 31 were $30,000.

Happy's expected cash collections for March would be:

A)$37,000

B)$32,000

C)$47,200

D)$30,250

49. Missouri Shirt Works is in the process of preparing its budget for next year.Cost of goods sold has been estimated at 60 percent of sales.Fabric purchases and payments are to be made during the month preceding the month of sale.Wages are estimated at 20 percent of sales and are paid during the month of sale.Other operating costs amounting to 25 percent of sales are to be paid in the month following the month of sales.Sales revenue is forecasted as follows:

Month

Sales

February

$220,000

March

$225,000

April

$240,000

May

$250,000

June

$255,000

What is the amount of fabric purchases during the month of March?

A)$240,000

B)$144,000

C)$288,000

D)$150,000

50. Which of the following items is typically considered in the development of the cash budget?

A)Selling expenses

B)Purchases

C)Administrative expenses

D)All of the above