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    Chapter 07 - Exercises - Part I

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    Rawan Yasser
    This document contains 6 exercises related to production and sales budgeting. Exercise 1 asks about cash expected to be collected in April based on given sales percentages. Exercise 2 asks about cash expected to be collected in March based on given sales and collection percentages. Exercise 3 asks about production needed in the first quarter to meet given sales projections and ending inventory requirements.

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    Chapter 07 - Exercises - Part I

    Uploaded by

    Rawan Yasser
    175 views2 pages
    This document contains 6 exercises related to production and sales budgeting. Exercise 1 asks about cash expected to be collected in April based on given sales percentages. Exercise 2 asks about cash expected to be collected in March based on given sales and collection percentages. Exercise 3 asks about production needed in the first quarter to meet given sales projections and ending inventory requirements.

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    basic earnings per share to solve for assignments

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    This document contains 6 exercises related to production and sales budgeting. Exercise 1 asks about cash expected to be collected in April based on given sales percentages. Exercise 2 asks about cash expected to be collected in March based on given sales and collection percentages. Exercise 3 asks about production needed in the first quarter to meet given sales projections and ending inventory requirements.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    175 views2 pages

    Chapter 07 - Exercises - Part I

    Uploaded by

    Rawan Yasser
    This document contains 6 exercises related to production and sales budgeting. Exercise 1 asks about cash expected to be collected in April based on given sales percentages. Exercise 2 asks about cash expected to be collected in March based on given sales and collection percentages. Exercise 3 asks about production needed in the first quarter to meet given sales projections and ending inventory requirements.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Chapter 07 – Exercises – Part I

    Exercise one:
    Sioux Company is estimating the following sales for the first six months of next year:
    January ...... $250,000
    February .... $220,000
    March ........ $240,000
    April .......... $300,000
    May ........... $360,000
    Sales at Sioux are normally collected as 60% in the month of sale, 35% in the month following
    the sale, and the remaining 5% being uncollectible. Based on this information, how much cash
    should Sioux expect to collect during the month of April?
    A) $250,800
    B) $264,000
    C) $290,700
    D) $306,000

    Exercise Two:
    All of Gaylord Company's sales are on account. Thirty-five percent of the credit sales are collected in the
    month of sale, 45% in the month following sale, and the rest are collected in the second month following
    sale. Bad debts are negligible and should be ignored. The following are budgeted sales data for the
    company:
    January February March April
    Total sales.............. $50,000 $60,000 $40,000 $30,000
    What is the amount of cash that should be collected in March?
    A) $39,000
    B) $37,000
    C) $27,500
    D) $51,000

    Exercise Three:
    Betz Company's sales budget shows the following projections for next year:
    Sales in units
    First Quarter ...................... 60,000
    Second Quarter .................. 80,000
    Third Quarter ..................... 45,000
    Fourth Quarter ................... 55,000

    Inventory at the beginning of the year was 18,000 units. The finished goods inventory at the end of each
    quarter is to equal 30% of the next quarter's budgeted unit sales. How many units should be produced
    during the first quarter?
    A) 24,000
    B) 48,000
    C) 66,000
    D) 72,000

    1
    Exercise Four:
    The following information relates to Minorca Manufacturing Corporation for next quarter:
    January February March
    Expected sales (in units)............................ 440,000 390,000 400,000
    Desired ending finished goods inventory
    (in units)................................................. 28,000 30,000 35,000

    How many units should Minorca plan on producing for the month of February?
    A) 360,000 units
    B) 388,000 units
    C) 392,000 units
    D) 420,000 units

    Exercise Five:
    The following are budgeted data:
    Month 1 Month 2 Month 3
    Sales in units ..................... 15,000 20,000 18,000
    Production in units ............ 16,000 22,000 15,000

    One pound of material is required for each finished unit. The inventory of materials at the end of
    each month should equal 20% of the following month's production needs. At the beginning of
    Month 1, 3,200 lbs. of materials were on hand. Purchases of raw materials for Month 2 would be
    budgeted to be:
    A) 17,600 pounds
    B) 23,400 pounds
    C) 20,600 pounds
    D) 25,000 pounds

    Exercise Six:
    Garry Manufacturing Corporation's most recent production budget indicates the following required
    production:

    October November December


    Required production (units) .......... 210,000 175,000 110,000

    Each unit of finished product requires 5 pounds of raw materials. The company maintains raw materials
    inventory equal to 25% of the next month's expected production needs. How many pounds of raw
    material should Garry plan on purchasing for the month of November?
    A) 1,006,250
    B) 793,750
    C) 1,012,500
    D) 893,500

    ***************
    2

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