Question

Bries Corporation is preparing its cash budget for January. The budgeted beginning cash balance is $18,900. Budgeted cash receipts total $187,500 and budgeted cash disbursements total $189,800. The desired ending cash balance is $30,900.

To attain its desired ending cash balance for January, the company should borrow:

Multiple Choice

• $30,900

• $47,500

• $14,300

• $0

Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.

	Beginning Inventory	Ending Inventory
Finished goods (units)	27,000	37,000
Raw material (grams)	57,000	47,000

Each unit of finished goods requires 3 grams of raw material. The company plans to sell 340,000 units during the year.

The number of units the company would have to manufacture during the year would be:

Multiple Choice

• 350,000 units

• 283,000 units

• 377,000 units

• 340,000 units

LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 3.9 hours of direct labor at the rate of $18.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June.

The budgeted direct labor cost per unit of Product WZ would be:

Multiple Choice

• $44.40

• $70.20

• $18.00

• $8.80

The manufacturing overhead budget at Foshay Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 7,900 direct labor-hours will be required in May. The variable overhead rate is $8.20 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $142,990 per month, which includes depreciation of $24,950. All other fixed manufacturing overhead costs represent current cash flows. The company recomputes its predetermined overhead rate every month. The predetermined overhead rate for May should be:

Multiple Choice

• $22.80

• $8.20

• $18.10

• $26.30

Answer 1

Answer-1)- To attain its desired ending cash balance for January, the company should borrow = $14300.

Explanation- Borrowed amount = Desired ending cash balance+ Budgeted cash disbursements- Budgeted beginning cash balance- Budgeted cash receipts

= ($189800+$30900)-($187500+$18900)

= $220700-$206400

= $14300

2)- The number of units the company would have to manufacture during the year would be = 350000 units.

Explanation-Number of unit produce = No. of units sell+ Ending finished goods (units)- Beginning finished goods (units)

=340000 units+37000 units-27000 units

= 350000 units

3)- The budgeted direct labor cost per unit of Product WZ would be= $70.20 per unit.

Explanation- Budgeted direct labor cost per unit of Product WZ = Hours required per unit*labor cost per hour

= 3.9 hours per unit*$18 per direct labor hour

= $70.20 per unit

4)- The predetermined overhead rate for May should be= $26.30 per hour.

Explanation- Predetermined overhead rate =Total budgeted manufacturing overhead/ Budgeted direct labor hours

= $207770/7900 direct labor hours

= $26.30 per hour

Where- Total budgeted manufacturing overhead = Variable manufacturing overhead+ Fixed manufacturing overhead

= ($8.20 per hour*7900 labor hours)+$142990

= $64780+$142990

= $207770