Question

2)Production and sales estimates for May for the Cardinal Co. are as follows:

Estimated inventory (units), May 1	18,800
Desired inventory (units), May 31	19,800
Expected sales volume (units):
Area W	6,300
Area X	8,800
Area Y	7,200
Unit sales price	$12.00

The number of units expected to be sold in May is

a.20,070

b.22,300

c.13,500

d.26,760

3)Finch Company began its operations on March 31 of the current year. Finch has the following projected costs:

	April	May	June
Manufacturing costs (1)	$155,000	$194,000	$215,000
Insurance expense (2)	840	840	840
Depreciation expense	1,930	1,930	1,930
Property tax expense (3)	430	430	430

(1) Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month.
(2) Insurance expense is $840 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October).
(3) Property tax is paid once a year in November.

The cash payments for Finch Company expected in the month of June are

a.$258,250

b.$161,250

c.$209,750

d.$48,500

4)Finch Company began its operations on March 31 of the current year. Finch has the following projected costs:

	April	May	June
Manufacturing costs (1)	$156,800	$195,200	$217,600
Insurance expense (2)	1,000	1,000	1,000
Depreciation expense	2,000	2,000	2,000
Property tax expense (3)	500	500	500

(1) Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month.
(2) Insurance expense is $1,000 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October).
(3) Property tax is paid once a year in November.

The cash payments for Finch Company expected in the month of June are

a.$214,000

b.$212,000

c.$215,500

d.$188,800

5)Finch Company began its operations on March 31 of the current year. Finch has the following projected costs:

	April	May	June
Manufacturing costs (1)	$156,800	$195,200	$217,600
Insurance expense (2)	1,000	1,000	1,000
Depreciation expense	2,000	2,000	2,000
Property tax expense (3)	500	500	500

(1) Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month.
(2) Insurance expense is $1,000 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October).
(3) Property tax is paid once a year in November.

The cash payments expected for Finch Company in the month of May are

a.$149,900

b.$185,600

c.$189,100

d.$187,600

6)Next year’s sales forecast shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12 per unit, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units. The desired ending inventory of B is 3,000 units.

Budgeted production of Product B for the year would be

a.23,200 units

b.22,500 units

c.24,500 units

d.26,500 units

7)Next year’s sales forecast shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12 per unit, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units. The desired ending inventory of B is 3,000 units.

Total budgeted sales of both products for the year would be

a.$264,000

b.$464,000

c.$42,000

d.$200,000

Answer 1

Q2.
Answer is b. 22300 units
Explanation:
Expected sales volume:
Area W		6300
Area X		8800
Area Y		7200
Expected sales units		22300
Q3.
Answer is c. $209750
Explanation:
Cash payment for June:
Manufacturing cost of May (194000*1/4)				48500
Manufacturing cost for June (215000*3/4)				161250
Insurance expense				0
Property tax				0
Depreciation				0
Cash payment for June:				209750
Q4.
Answer is b. $ 212000
Explanation:
Cash payment for June:
Manufacturing cost of May (195200*1/4)				48800
Manufacturing cost for June (217600*3/4)				163200
Insurance expense				0
Property tax				0
Depreciation				0
Cash payment for June:				212000
Q5.
Answer is b. $ 185600
Explanation:
Cash payment for May:
Manufacturing cost of April (156800*1/4)				39200
Manufacturing cost for MAy (195200*3/4)				146400
Insurance expense				0
Property tax				0
Depreciation				0
Cash payment for June:				185600
Q6.
Answer is b. 22500 units
Explanation:
Budgeted Production of Producct B:
Busgeted sales units			22000
Add: Desired Ending inventory			3000
Total Requirement			25000
Less: Desired Beginning Inventory			2500
Budgeted Production Units			22500
Q7.
Answer is b. $ 464000
Explanation:
			Product A	Product B	Total
Budgeted sales units			20000	22000
Selling price per unit			10	12
Budgeted sales in $			200000	264000	464000