Question

___ 3. Archer Company has budgeted sales of

30,000 units in April, 40,000 units in May, and 60,000

units in June. The company has 6,000 units on hand on

April 1. If the company requires an ending inventory

equal to 20% of the following month’s sales, produc-

tion during May should be: a) 32,000 units; b) 44,000

units; c) 36,000 units; d) 40,000 units.

___ 4. Refer to the data for Archer Company in

question 3. Each unit requires 3 pounds of a material.

A total of 24,000 pounds of the material were on hand

on April 1, and the company requires materials on

hand at the end of each month equal to 25% of the fol-

lowing month’s production needs. The company plans

to produce 32,000 units of finished goods in April.

How many pounds of the material should the company

plan to purchase in April? a) 105,000; b) 19,000; c)

87,000; d) 6,000.

___ 5. If the beginning cash balance is $15,000,

the required ending cash balance is $12,000, cash dis-

bursements are $125,000, and cash collections from

customers are $90,000, the company must borrow: a)

$32,000; b) $20,000; c) $8,000; d) $38,000.

Answer #1

Cliff Co.’s budgeted sales for the month of April are 18034
units. The company has 5092 units on hand in opening inventory and
would like to have 13698 units on hand at April 30.
Each unit requires 3 kg of raw material. The opening and
targeted ending raw material inventory for the month of April is
31098 kg and 44729 kg, respectively.
How many kg of raw material must Cliff Co. purchase for the
month of April?
Select one:
a....

Tyler Co.
Production Budget
April, May and June
April
May
June
Next month’s budgeted sales
(units)
%
%
%
0
0
0
Units to be produced
0
0
0
Tyler Co. predicts the following unit sales for the next four
months: April, 3,600 units; May, 4,700 units; June, 6,700 units;
and July, 3,000 units. The company’s policy is to maintain finished
goods inventory equal to 20% of the next month’s sales. At the end
of March, the company had 700...

Adham Company has budgeted to produce 20,000 units in January
and 30,000 units in February. Two pounds of material A are required
for each unit produced. The company has a policy of maintaining a
stock of material A on hand at the end of each month equal to 20%
of the next month's production needs for material A. A total of
8,000 pounds of material A are on hand to start the year. Budgeted
purchases of material A for January...

ABC Company’s budgeted sales for June, July, and August are
12,400, 16,400, and 14,400 units, respectively. ABC requires 30% of
the next month’s budgeted unit sales as finished goods inventory
each month. Budgeted ending finished goods inventory for May is
3,720 units. Each unit that ABC Company produces uses 3 pounds of
raw material. ABC requires 25% of the next month’s budgeted
production as raw material inventory each month. Required:
Calculate the number of pounds of raw material to be...

ABC Company’s budgeted sales for June, July, and August are
15,600, 19,600, and 17,600 units, respectively. ABC requires 30% of
the next month’s budgeted unit sales as finished goods inventory
each month. Budgeted ending finished goods inventory for May is
4,680 units. Each unit that ABC Company produces uses 3 pounds of
raw material. ABC requires 25% of the next month’s budgeted
production as raw material inventory each month.
Required:
Calculate the number of pounds of raw material to be...

4.
James Co. has projected sales of $200,000 in April, $250,000 in
May, $300,000 in June and $200,000 in July. James desires an ending
finished goods inventory each month equal to 30% of next month’s
projected sales. If finished goods ending in inventory in March was
$70,000, prepare a production budget for each of the months of
April, May, and June. The sales price for each unit was $10 and the
markup on Cost was 25 per cent.
5. Based...

Assume a company’s sales budget for April and May is 31,000
units and 33,000 units, respectively. Its production budget for the
same two months is 28,000 units and 29,000 units, respectively.
Each unit of finished goods required 6 pounds of raw materials. The
company always maintains raw materials inventory equal to 30% of
the following months production needs.
Also assume the company pays $2.00 per pound of raw material. It
always pays for 60% of its raw material purchases in...

ZIRA CO.
Direct Materials Budget
For April, May, and June
April
May
June
Budgeted production (units)
694
735
727
units
Materials requirements per unit
4
4
4
lbs.
Materials needed for production
(lbs.)
2,776
2,940
2,908
lbs.
Budgeted ending inventory (lbs.)
882
872
872
lbs.
Total materials requirements
(lbs.)
3,658
3,812
3,780
lbs.
Beginning inventory (lbs.)
833
882
872
lbs.
Materials to be purchased (lbs.)
2,825
2,930
2,908
lbs.
Cost per lb.
$4
$4
$4
per lb.
Total budgeted direct...

Assume a company’s sales budget for April and May is 47,000
units and 49,000 units, respectively. Its production budget for the
same two months is 44,000 units and 45,000 units, respectively.
Each unit of finished goods required 3 pounds of raw materials. The
company always maintains raw materials inventory equal to 30% of
the following months production needs.
Also assume the company pays $2.80 per pound of raw material. It
always pays for 50% of its raw material purchases in...

Assume the sales budget for April and May is 37,000 units and
39,000 units, respectively. The production budget for the same two
months is 34,000 units and 35,000 units, respectively. Each unit of
finished goods required 5 pounds of raw materials. The company
always maintains raw materials inventory equal to 25% of the
following month's production needs. How many pounds of raw material
need to be purchased in April?

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