Question

2. Webster Corporation is preparing its cash budget for April. The March 31 cash balance is $36,500. Cash receipts are expected to be $642,000 and cash payments for purchases are expected to be $609,500. Other cash expenses expected are $27,100 selling and $33,600 general and administrative. The company desires a minimum cash balance at the end of each month of $31,000. If necessary, the company borrows enough cash to meet the minimum using a short-term note. Webster's preliminary cash balance before loan activity for April is expected to be:

A. $69,000. B. $31,000 C. $8,300 D. $22,700 E. (28,200)

3. Trago Company manufactures a single product and has a JIT policy that ending inventory must equal 20% of the next month's sales. It estimates that May's ending inventory will consist of 59,800 units. June and July sales are estimated to be 299,000 and 309,000 units, respectively. Trago assigns variable overhead at a rate of $3.70 per unit of production. Fixed overhead equals $419,000 per month. Compute the total budgeted overhead for June.

A. $1,113,700 B. $1,542,700 C.$1,532,700 D.$1,562,300 E.$1,525,300.

4. Zhang Industries budgets production of 220 units in June and 230 units in July. Each unit requires 1.5 hours of direct labor. The direct labor rate is $12.40 per hour. The indirect labor rate is $19.40 per hour. Compute the budgeted direct labor cost for July.

A. $4092. B. $4278. C. $10,971 D. $6402. E. $6693.

5. Use the following information to determine the ending cash balance to be reported on the month ended June 30 cash budget.

a. Beginning cash balance on June 1, $95,600.
b. Cash receipts from sales, $421,000.
c. Budgeted cash payments for purchases, $276,000.
d. Budgeted cash payments for salaries, $96,600.
e. Other budgeted cash expenses, $58,600.
f. Cash repayment of bank loan, $33,600.
g. Budgeted depreciation expense, $35,600.

A. $110,400. B. $85,400. C. $74,800. D.$16,200. E.$51,800.

Answer 1

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2. Webster Corporation
Cash budget	April
Expected cash collections	642,000.00
Total Cash Receipts	642,000.00
Estimated cash payments for
Cash payments for purchases	609,500.00
Cash expenses for selling	27,100.00
Cash expenses for general and administrative	33,600.00
Total cash payments	670,200.00
Cash increase or (decrease)	(28,200.00)
Cash Balance at the beginning of month	36,500.00
Cash Balance before borrowings/(repayment)	8,300.00
Answer is option C. $ 8,300.
3. Trago Company
Overhead budget	June	Note
Sales (units)	299,000.00
Add: Desired Ending Inventory- 20% of 309,000	61,800.00
Total bracelet needed	360,800.00
Less: Expected Beginning Inventory	59,800.00
Production Budget	301,000.00	A
Variable overhead rate	3.70	B
Budgeted Variable overhead	1,113,700.00	C=A*B
Add: Fixed overhead	419,000.00
Total budgeted overhead	1,532,700.00
Answer is option C. $ 1,532,700.
4. Zhang Industries
Direct Labor budget	July	Note
Production Budget	230.00	D
Direct labor hour per unit	1.50	E
Direct labor hour required	345.00	F=D*E
Direct labor rate per hour	12.40	G
Direct Labor budget	4,278.00	H=F*G
Answer is option B. $ 4,278.
5. Cash budget	June
Expected cash collections	421,000.00
Total Cash Receipts	421,000.00
Estimated cash payments for
Cash payments for purchases	276,000.00
Cash payments for salaries	96,600.00
Budgeted cash expenses	58,600.00
Repayment of bank loan	33,600.00
Total cash payments	464,800.00
Cash increase or (decrease)	(43,800.00)
Cash Balance at the beginning of month	95,600.00
Cash Balance before borrowings/(repayment)	51,800.00
Answer is option E. $ 51,800.