Use the following to answer questions below:
The following information is from the manufacturing budget and
budgeted financial statements of Pinecove Industries:
Direct materials inventory, 1/1 $104,000
Direct materials inventory, 12/31 128,000
Direct materials budgeted for use during year 400,000
Accounts payable to suppliers, 1/1 80,000
Accounts payable to suppliers, 12/31 120,000
Question 1. Refer to the information above. For the year, budgeted purchases of direct materials amounted to:
a. $360,000
b. $376,000
c. $384,000
d. $424,000
Question 2. Refer to the information above. For the year, budgeted cash payments to suppliers amounted to:
a. $360,000
b. $376,000
c. $384,000
d. $424,000
Question 3. Pinecove Industries has budgeted a total of $345,600 in costs and expenses for the upcoming quarter. Of this amount, $30,000 represents depreciation expense and $3,600 represents the expiration of prepayments. Rockgrove's current payables balance is $240,000 at the beginning of the quarter. Budgeted payments on current payables for the quarter amount to $360,000. The company's estimated current payables balance at the end of the quarter is:
a. $180,000
b. $192,000
c. $204,000
d. $312,000
Question 4. Crane Company has budgeted sales for the upcoming quarter as follows:
April May June
Units 1,500 1,800 1,650
The desired ending finished goods inventory for each month is onehalf of next month's budgeted sales. Three pounds of direct material
are required for each unit produced. The desired ending inventory of direct material is 20% of next month's production requirements. If
direct material costs $4 per pound, and must be paid for in the month of purchase, the budgeted direct materials purchases (in dollars) for April are:
a. $19,980
b. $20,700
c. $19,800
d. $18,000
Use the following to answer questions below.
On July 1 of the current year, Nesbit Corporation prepared a cash budget for July, August, and September. All of Nesbit's sales are
made on account. The following information was used in preparing estimated cash collections:
May sales (actual) $30,000
June sales (actual) 40,000
July sales (estimated) 60,000
August sales (estimated) 70,000
September sales (estimated) 80,000
Approximately 50% of all sales are collected in the month of the sale.
Of the remaining amount outstanding, 30% is collected in the following month, and 20% is collected in the month thereafter.
Question 5. Refer to the information above. Budgeted collections from customers in July total:
a. $42,000
b. $48,000
c. $50,000
d. $56,000
Question 6. Refer to the information above. Budgeted collections from customers in August total:
a. $35,000
b. $53,000
c. $59,000
d. $61,000
Question 7. Refer to the information above. Budgeted collections from customers in September total:
a. $51,000
b. $61,000
c. $73,000
d. $76,000
Question 8. Foothills, Inc. uses a flexible budget. Foothills produced 14,000 units in May incurring direct materials cost of $18,000. Its master budget for the year projected direct materials cost of $180,000, at a production volume of 144,000 units. A flexible budget for May should reflect direct materials cost of:
a. $18,000
b. $17,500
c. $21,000
d. $18,150