Prepare Operational Budget Assignment I Submission Date - 25/06/15 E.C

Prepare Operational Budget Assignment I
Submission Date -25/06/15 E.C.
1. Blue Book printing is budgeting sales of 25,000 units and already has 5,000 units
in beginning inventory. How many units must be produced to also meet the 7,000
units required in ending inventory?
2. How many units are in beginning inventory if 32,000 units are budgeted for sales,
35,000 units are produced, and the desired ending inventory is 9,000 units?
3. Navigator sells GPS trackers for $50 each. It expects sales of 5,000 units in quarter
1 and a 5% increase each subsequent quarter for the next 8 quarters. Prepare a
sales budget by quarter for the first year.
4. One Device makes universal remote controls and expects to sell 500 units in
January, 800 in February, 450 in March, 550 in April, and 600 in May. The
required ending inventory is 20% of the next month’s sales. Prepare a production
budget for the first four months of the year.
5. Sunrise Poles manufactures hiking poles and is planning on producing 4,000 units
in March and 3,700 in April. Each pole requires a half pound of material, which
costs $1.20 per pound. The company’s policy is to have enough material on hand
to equal 10% of the next month’s production needs and to maintain a finished
goods inventory equal to 25% of the next month’s production needs. What is the
budgeted cost of purchases for March?
6. Given the following information from Rowdy Enterprises’ direct materials budget,
how much direct materials needs to be purchased?
*Each unit requires direct labor of 2.2 hours. The labor rate is $11.50 per hour and
next year’s direct labor budget totals $834,900. How many units are included in
the production budget for next year?
7. How many units are estimated to be sold if Skyline, Inc., has a planned production
of 900,000 units, a desired beginning inventory of 160,000 units, and a desired
ending inventory of 100,000 units?
8. Cash collections for Wax On Candles found that 60% of sales were collected in
the month of the sale, 30% was collected the month after the sale, and 10% was
collected the second month after the sale. Given the sales shown, how much cash
will be collected in January and February?
9. Nonna’s Re-Appliance Store collects 55% of its accounts receivable in the month
of sale and 40% in the month after the sale. Given the following sales, how much
cash will be collected in February?
10. Dream Big Pillow Co. pays 65% of its purchases in the month of purchase, 30%
the month after the purchase, and 5% in the second month following the purchase.
It made the following purchases at the end of 2017 and the beginning of 2018:
11. Desiccate purchases direct materials each month. Its payment history shows that
70% is paid in the month of purchase with the remaining balance paid the month
after purchase. Prepare a cash payment schedule for March if in January through
March, it purchased $35,000, $37,000, and $39,000, respectively.
12. What is the amount of budgeted cash payments if purchases are budgeted for
$420,000 and the beginning and ending balances of accounts payable are $95,000
and $92,000, respectively?
13. Halifax Shoes has 30% of its sales in cash and the remainder on credit. Of the
credit sales, 65% is collected in the month of sale, 25% is collected the month after
the sale, and 5% is collected the second month after the sale. How much cash will
be collected in August if sales are estimated as $75,000 in June, $65,000 in July,
and $90,000 in August?
14. Cold X, Inc. uses this information when preparing their flexible budget: direct
materials of $2 per unit, direct labor of $3 per unit, and manufacturing overhead of
$1 per unit. Fixed costs are $35,000. What would be the budgeted amounts for
20,000 and 25,000 units?
15. Using the provided budgeted information for production of 10,000 and 15,000
units, prepare a flexible budget for 17,000 units.
16. The production cost for a waterproof phone case is $7 per unit and fixed costs are
$23,000 per month. How much is the favorable or unfavorable variance if 5,500
units were produced for a total of $61,000?
17. Lovely Wedding printing is budgeting sales of 32,000 units and already has 4,000
in beginning inventory. How many units must be produced to also meet the 6,000
units required in ending inventory?

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