Question

In: Accounting

Q1: The Cardinal Company had a finished goods inventory of 55,000 units on January 1. Its...

Q1:

The Cardinal Company had a finished goods inventory of 55,000 units on January 1. Its projected sales for the next four months were: January - 200,000 units; February - 180,000 units; March - 210,000 units; and April - 230,000 units. The Cardinal Company wishes to maintain a desired ending finished goods inventory of 20% of the following month’s sales.

What is the budgeted units of production for January?

a.200,000

b.181,000

c.219,000

d.236,000

Q2:

The Cardinal Company had a finished goods inventory of 55,000 units on January 1. Its projected sales for the next four months were: January - 200,000 units; February - 180,000 units; March - 210,000 units; and April - 230,000 units. The Cardinal Company wishes to maintain a desired ending finished goods inventory of 20% of the following month's sales.

What is the budgeted units of production for February?

a.174,000

b.222,000

c.186,000

d.181,000

Q3:

Woodpecker Co. has $295,000 in accounts receivable on January 1. Budgeted sales for January are $930,000. Woodpecker Co. expects to sell 20% of its merchandise for cash. Of the remaining 80% of sales on account, 75% are expected to be collected in the month of sale and the remainder the following month. The January cash collections from sales are

$831,200

$1,334,000

$1,039,000

$623,400

Q4:

Consider Derek's budget information: materials to be used totals $65,800; direct labor totals $200,100; factory overhead totals $395,000; work in process inventory January 1, $186,900; and work in progress inventory on December 31, $196,600. What is the budgeted cost of goods manufactured for the year?

$847,800

$196,600

$660,900

$651,200

Q5:

For February, sales revenue is $604,000; sales commissions are 4% of sales; the sales manager's salary is $94,900; advertising expenses are $93,500; shipping expenses total 2% of sales; and miscellaneous selling expenses are $2,500 plus 1/2 of 1% of sales. Total selling expenses for the month of February are

$227,140

$230,160

$190,900

$215,060

Expert Solution

Q1 - The answer is 181,000 units.

Calculation of budgeted units of Production in January:

Sales = Opening stock + purchases or Production - Closing stock

From the above formula we can derive, Production (in units) = Sales - Opening stock + Closing stock

= 200,000 - 55,000 + 36,000

= 181,000 units.

Note - Closing stock for the month January = 20% of estimated sales in February = 180,000 X 20% = 36,000 units

Q2 - The answer is 186,000 units

Calculation of budgeted units of Production in February:

Sales = Opening stock + purchases or Production - Closing stock

From the above formula we can derive, Production (in units) = Sales - Opening stock + Closing stock

= 180,000 - 36,000 + 42,000

= 186,000 units

Note 1 - Closing stock for the month of January will become Opening stock for the month of February.

Note 2 - Closing stock for the month February= 20% of estimated sales in March = 210,000 X 20% = 42,000 units

Q3 The answer is $1,039,000.

Calculation January cash collection

Opening Accounts Receivables (i.e on Jan 1) = $295,000

Budgeted total Sales in January (On cash + On account) = $930,000

Expected cash sales = 20% of total budgeted sales = $930,000 X 20% = $186,000 ------------> A

Sales on account = 80% of total budgeted sales = $930,000 X 80% = $744,000

Cash collection relating to sales in January = 75% of credit sales = $744,000 X 75% = $558,000 --------------> B

Cash collection relating to accounts receivable on Jan 1 = $295,000 --------------> C

Total cash Collection in the month of January = A + B C = $1,039,000 ,

Q4 The answer is $651,200.

Budgeted cost of goods manufactured = Direct material + Labour cost + Factory OH + Opening WIP - Closing WIP

A. Budgeted direct material = $65,800

B. Budgeted direct Labour = $200,100

C. Budgeted factory overhead (OH) = $395,000

D. Opening Work in progress (WIP) = $186,900

E. Closing Work in progress (WIP) = $196,600

Therefore budgeted cost of goods manufactured = $65,800 + $200,100 + $395,000 + $186,900 - $196,600

= $651,200

Q5 The answer is $230,160.

Calculation of total selling expenses:

A. Sales Commisssion = 4% of sales = $604,000 X 4% = $24,160

B. Sales manager salary = $94,900

C. Advertising expenses = $93,500

D. Shipping expenses = 2% of sales = $604,000 X 2% = $12,080

E. Misc selling expenses = $2500 + (1% of sales)/2 = $2500 + ($604,000 X 1%)/2 = $2500 + $3020 = $5,520

Total selling expenses = A + B + C + D + E = $230,160

Hope this is useful and thank you!!!!!!

ekkarill92 answered 2 years ago

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