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    Garrison 14e Practice Exam - Chapter 8

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    Titas Khan
    The document provides sample practice exam questions and solutions for a chapter in a management accounting textbook. The questions cover topics like cash budgeting, materials budgeting, and production and direct labor budgeting. The solutions show the calculations and schedules required to answer the practice exam questions on these budgeting topics.

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    Garrison 14e Practice Exam - Chapter 8

    Uploaded by

    Titas Khan
    237 views3 pages
    The document provides sample practice exam questions and solutions for a chapter in a management accounting textbook. The questions cover topics like cash budgeting, materials budgeting, and production and direct labor budgeting. The solutions show the calculations and schedules required to answer the practice exam questions on these budgeting topics.

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    GNB14eCh08Exam

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    The document provides sample practice exam questions and solutions for a chapter in a management accounting textbook. The questions cover topics like cash budgeting, materials budgeting, and production and direct labor budgeting. The solutions show the calculations and schedules required to answer the practice exam questions on these budgeting topics.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    237 views3 pages

    Garrison 14e Practice Exam - Chapter 8

    Uploaded by

    Titas Khan
    The document provides sample practice exam questions and solutions for a chapter in a management accounting textbook. The questions cover topics like cash budgeting, materials budgeting, and production and direct labor budgeting. The solutions show the calculations and schedules required to answer the practice exam questions on these budgeting topics.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
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    Garrison 14e Practice Exam Chapter 8

    Print these pages. Answer each of the following questions, explaining your answers or showing your work, and then compare your solutions to those provided at the end of the practice exam. 1. Experience has shown that 50% percent of the sales of Geraghty Company sales are for cash. Monthly sales are budgeted as follows: $280,000 for October, $240,000 for November, and $320,000 for December. The rest are on credit with 70% of the credit sales are collected in the month of sale, 20% in the month following sale, and 5% in the second month following sale. The remainder is expected to be uncollectible. Prepare a schedule of expected cash collections for the month of December.

    2. Maganti Manufacturing Company has budgeted production for next year as follows. First Quarter 80,000 Second Quarter 96,000 Third Quarter 128,000 Fourth Quarter 112,000

    Production in units

    Ten pounds of raw materials are required for each unit produced. Raw materials on hand at the beginning of the year total 20,000 lbs. The raw materials inventory at the end of each quarter should equal 10% of the next quarter's production needs. Prepare a direct materials budget for the second quarter.

    3. Kromelow Company manufactures lamp shades. Budgeted sales of lamp shades are 3,200 units in January, 4,800 units in February, and 4,000 units in March. Management believes that an ending inventory equal to 20% of the next month's sales strikes the appropriate balance between excessive and insufficient inventories. Each lamp shade requires 1.5 direct labor hours. The average direct labor rate is $10.00 per hour. Part (a) Prepare a production budget for February.

    Part (b) Prepare a direct labor budget for February.

    GNB 14e Practice Exam Solutions Chapter 8


    1.Solution (Learning Objective 2): Collected during December $112,000 160,000 272,000 24,000 7,000 $303,000

    Month of Sale December: Credit Cash November October Total cash collections

    Calculations ($320,000 x .50 x .70) ($320,000 x .50) ($240,000 x .50 x .20) ($280,000 x .50 x .05)

    2.Solution (Learning Objective 4): Required for: Second quarter production (96,000 x 10 lbs.) Planned ending inventory (128,000 x .10 x 10 lbs.) Less planned beginning inventory (96,000 x .10 x 10 lbs.) Raw materials to be purchased (pounds) 960,000 128,000 (96,000) 992,000

    3.Part (a) Solution (Learning Objective 3): Budgeted production for February would be determined as follows. Sales Plus planned ending inventory (4,000 x .20) Less beginning inventory (4,800 x .20) Units to be produced Part (b) Solution (Learning Objective 5): Required production in frames Direct labor hours required per frame Total direct labor hours needed Direct labor cost per hour Total direct labor cost 4,640 1.5 6,960 x $10.00 $69,600 x 4,800 800 (960) 4,640

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