AC 420 AC420 Unit 6 Quiz Answers (Kaplan University)

AC 420 Unit 6 Quiz (Kaplan University)

1. When actual performance varies from the budgeted performance, managers will be more likely to revise future budgets if the variances were
2. The amount of raw material purchased in a period may be different than the amount of material used that
   period because
3. A company that maintains a raw material inventory, which is based on the following month's production needs, will purchase less material than it uses in a month where
4. If a company has a policy of maintaining an inventory of finished goods at a specified percentage of the next
   month's budgeted sales, budgeted production for January will exceed budgeted sales for January when
   budgeted
5. Matthews Company has a policy of maintaining an inventory of finished goods equal to 30 percent of the
   following month's sales. For the forthcoming month of March, Matthews has budgeted the beginning
   inventory at 30,000 units and the ending inventory at 33,000 units. This suggests that
6. For the month of November, Whetzel Corporation. predicts total cash collections to be $1 million. Also for
   November, Whetzel Corporation. estimates that its beginning cash balance will be $50,000 and that it will
   borrow cash in the amount of $70,000. If Whetzel Corporation. estimates an ending cash balance of $30,000
   for November, what must its projected cash disbursements be?
7. For the month of March, Robertson Corporation. predicts total cash collections to be $1.5 million. Also for
   March, Robertson Corporation. estimates that its beginning cash balance will be $60,000 and that it will
   borrow cash in the amount of $80,000. If Robertson Corporation. estimates an ending cash balance of
   $40,000 for March, what must its projected cash disbursements be?
8. Sullivan Company is preparing its Manufacturing Overhead budget for the second quarter of the year. Budgeted variable factory overhead is $3.00 per unit produced; budgeted fixed factory overhead is $75,000 per month, with $16,000 of this amount being factory depreciation.
   
   If the budgeted cash disbursements for factory overhead for June are $80,000, then the budgeted production for June must be:
9. Mercy Medical Center has provided you with the following budget information for April:
   
   Cash collections        $876,000
   April 1 cash balance      23,000
   Cash disbursements    978,600
   
   Mercy has a policy of maintaining a minimum cash balance of $20,000 and borrows only in $1,000
   increments. How much will Mercy borrow in April?
10. Bentonville Medical Center has provided you with the following budget information for July:
    
    Cash collections         $918,000
    July 1 cash balance        32,000
    Cash disbursements   1,020,400
    
    Bentonville has a policy of maintaining a minimum cash balance of $30,000 and borrows only in $1,000
    increments. How much will Bentonville borrow in July?
11. Lindburgh Company manufactures toy airplanes. Information on Lindburgh Company's labor costs follow:
    
    Sales commissions       $5 per plane
    Administration               $10,000 per month
    Indirect factory labor      $3 per plane
    Direct factory labor        $5 per plane
    
    The following information applies to the upcoming month of July for Lindburgh Company:
    
    Budgeted production 1,200 units
    Budget sales 1,000 units
    
    What amount of budgeted labor cost would appear in the July selling, general, and administrative expense budget?
12. Lindburgh Company manufactures toy airplanes. Information on Lindburgh Company's labor costs follow:
    
    Sales commissions    $5 per plane
    Administration            $10,000 per month
    Indirect factory labor   $3 per plane
    Direct factory labor     $5 per plane
    
    The following information applies to the upcoming month of July for Lindburgh Company:
    
    Budgeted production 1,200 units
    Budget sales 1,000 units
    
    What is Lindburgh?s budgeted factory labor cost for July?
13. Budgeted sales for Fleetwood Corporation for the first quarter the year are shown below:
    
                  JANUARY     FEBRUARY     MARCH
    UNITS:      35,000           25,000           32,000
    
    The company has a policy that requires the ending inventory in each period to be 10 percent of the following period's sales. Assuming that the company follows this policy, what quantity of production should be scheduled for February?
14. Budgeted sales for Parker Corporation for the second quarter the year are shown below:
    
                   APRIL     MAY     JUNE
    UNITS:    40,000   30,000    38,000
    
    The company has a policy that requires the ending inventory in each period to be 15 percent of the following period's sales. Assuming that the company follows this policy, what quantity of production should be scheduled for May?
15. Production of Product B has been budgeted at 200,000 units for November. One unit of Product B requires 2 lbs. of raw material. The projected beginning and ending materials inventory for November are:
    
    Beginning inventory:    2,000 lbs.
    Ending inventory:       10,000 lbs.
    
    How many lbs. of material should be purchased during November?