Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd
Upload
29 views

Chapter 6 Problem (Without solutions)

Uploaded by

九.
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
29 views

Chapter 6 Problem (Without solutions)

Uploaded by

九.
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 6

ACCT 2121: Ch 6.

Problem
Student ID:
Student Name:

Problem 1 Kinder Company shows the following estimates for unit sales for next year: The
company expects to sell its goods for $50 per unit.
Required:
a.) Prepare a sales budget for the year ended December 31.
Additional information

The company expects to collect 70% of sales in the quarter of the sale, and 25% in the
quarter following the sale. 5% of sales are expected to be uncollectible. The company’s
beginning accounts receivable was $125,000, all of which was expected to be collected in
the first quarter.
Required:
b.) Prepare a schedule of expected cash collections for the year ended December 31.

Problem 2
Murphy Company shows the following estimates for unit sales for the first quarter of its
upcoming fiscal year:

The company requires finished goods inventory on hand equal to 20% of the next month’s
expected sales.
The company expects to begin January with 600 units in inventory. The expected unit sales
for April are 5,000.
Required:
Prepare a production budget for the quarter.
Problem 3
Fung Company manufactures faux-leather bags. Each bag takes 0.5 yards of material. The
material costs $5 per yard. The company had 1,500 yards of material on hand at the
beginning of January and required enough ending monthly materials to be on hand to meet
10% of the following month’s production requirements.
The company’s production budget follows:

The company expects to produce 40,000 units in April.


Required:
Prepare a materials purchases budget for the quarter. Provide both the number of yards, and
dollar value of inventory to be purchased.
Problem 4
Meeho Company’s production requirements are as follows:

Each unit requires two direct labour hours to produce and workers are paid $15.00 per hour.
Required
a.) Assuming a completely flexible labour force, prepare the company’s direct labour budget
for the quarter.
b.) Refer to the original data. Assume the company has permanent employees who are
guaranteed to be paid for at least 11,500 hours of work per month. If production requires less
than 11,500 hours, they will be paid for 11,500 hours anyway. Any amount of work above
11,500 hours will be paid at 1.5 times their normal hourly rate.

Problem 5
Singular Inc. budgets direct labour hours for the first quarter as follows:

The company’s variable overhead rate is $10 per direct labour hour. The company’s fixed
overhead is $100,000 per month – this number includes monthly depreciation of $25,000.
Required
Prepare the company’s manufacturing overhead budget for the quarter.
Problem 6
The budgeted unit sales for Purple Corporation for the upcoming quarter are as follows:

The company’s variable expenses include:


Shipping expenses: $2.00 per unit
Sales commissions: $5.00 per unit
Other expenses: $6.00 per unit
The company’s fixed expenses are:
Advertising: $75,000 per month
Executive salaries: $90,000 per month
Depreciation: $20,000 per month
Also, executive bonus payments of $25,000 will be made in the July and September, and a
major building repair of $35,000 will be paid in August.
Required:
Prepare the company’s selling and administrative budget for the upcoming quarter. Disclose
both total selling and administrative expenses and cash disbursements for selling and
administrative expenses.

Problem 7
Cookie Crunchers had the following estimated cash flows for the first quarter:

The company begins the year with $20,000 in cash and requires a minimum cash balance of
$10,000. The company may borrow any amount from a local bank at an annual interest rate
of 6%, The borrowing must occur at the beginning of any month and all repayments must be
made at the end of any month. Interest must be repaid at the time of loan repayment.
Required:
Prepare the company’s cash budget for the upcoming year
Problem 8
Lubriderm Corporation has the following budgeted unit sales for the next six-month period:

Month Unit Sales


June 90,000
July 120,000
August 210,000
September 150,000
October 180,000
November 120,000

There were 30,000 units of finished goods in inventory at the beginning of June. Plans are to
have an inventory of finished products that equal 20% of the unit sales for the next month.

Five pounds of materials are required for each unit produced. Each pound of material costs
$8. Inventory levels for materials are equal to 30% of the needs for the next month. Materials
inventory on June 1 was 15,000 pounds.

Required:

a. Prepare production budgets in units for July, August, and September.

b. Prepare a purchases budget in pounds for July, August, and September, and give total
purchases in both pounds and dollars for each month.
[empty sheet]

You might also like