1 XYZ Company paid for its purchases of inventory 25 in the

1). XYZ Company paid for its purchases of inventory 25% in the quarter of purchase and 75% in the following quarter. XYZ had purchases of $100,000 in the first quarter, $200,000 in the second quarter, and $300,000 in the third quarter. How much cash was paid to suppliers in the second quarter?

A. $125,000

B. $175,000

C. $200,000

D. $275,000

2). Which of the following budgets must be completed before the Raw Material Purchases Budget?

A. Cash Disbursements Budget

B. Cash Collections Budget

C. Sales Budget

D. Selling and Administrative Budget

3). The monthly manufacturing overhead budget at ABC Corporation includes the following:

Variable Manufacturing Overhead (based on direct labor-hours)

$9 per direct labor hour

Fixed Manufacturing Overhead (including depreciation of $3,270)

$43,040

In September there were 2,200 direct labor hours worked. What is the budgeted cash disbursements for manufacturing overhead for September?

A.    $39,320

B.    $19,800

C.    $62,840

D.    $59,570

4). ABC Corporation makes and sells cell phone covers. Each cell phone cover requires 6 minutes of direct labor at the standard rate of $18.00 per direct labor-hour. What is the budgeted direct labor cost per cell phone cover?

A.    $1.80 per cell phone cover

B.    $3.00 per cell phone cover

C.    $1.08 per cell phone cover

D.    $18.00 per cell phone cover

5). ABC Corporation is in the process of preparing its annual budget. The following beginning and ending finished goods inventory levels are planned for the year  

Beginning Inventory

Ending Inventory

Finished goods (units)

20,000 units

70,000 units

If the company plans to sell 600,000 finished goods units during the year, the number of units it would have to manufacture during the year would be:

A. 580,000 units

B. 600,000 units

C. 650,000 units

D. 670,000 units

Solution

1.A.$125,000.

2C..Sales budget.

sales budget must be prepared before raw materials budget to know the requirements of raw materials for production.

3.D.59,570..

4.A.$1.80 per cell phone cover.

$18 is per hour i.e 60 minutes.

so for 6 minutes the amount to be charge will be= $18 * 6 minutes / 60 minnutes

=>$1.80.

5.C.650,000 units.

units to be manufactured = units sold + closing inventory - beginning inventory

=>600,000 +70,000 - 20,000

=>650,000 units