1. Projected sales are: February, P100,000; March, $90,000; April, $80,000; May, $100,000; and June, $110,000. 30% of sales are cash sales and 70% are account sales. Accounts are collected 40% in the month following the sale and 55% collected 2 months following the sale. What is the total cash receipts in May? 2. Projected sales are: February, P200,000; March, P180,000; April, P160,000; May, P200,000; P200,000; and June, P220,000. P220,000. 30% of sales are cash sales and 70% are account sales. Accounts are collected 40% in the month following the sale and 60% collected 2 months following the sale. What is the accounts receivable for May 31? 3. Grissom pays for purchases 30% during the month of purchase and the remainder in the following month. January purchases are projected to be $40,000; February purchases will be $60,000. What is the accounts payable balance for February 28? 4. Sarah Company budgeted sales of 22,000 units for January and 30,000 for February. The budgeted beginning inventory for January 1 was 7,000 units. Sarah desires an ending inventory half of the following month's sales needs. What is the budgeted budgeted production for January? January? 5. Mueller estimates its supplies purchases to be P10,500 in August and P14,000 in September. Mueller pays 70% of its accounts in the month of purchase and the rest is paid the following month. September payments would be: 6. Jobee Company budgeted purchases of 10,000 units. The budgeted beginning inventory was 2,400 units and the budgeted ending inventory was 3,000 units. What is the budgeted budgeted sales? 7. Bookie sells a product for P10. The cost is P4 per unit and Bookie pays a 20% sales commission. commission. Fixed costs are P45,000 per month including P12,000 depreciation, and the company maintains inventory equal to budgeted sales needs for the following following month. The following budgeted budgeted data are available. Inventory on hand, February 1 Budgeted sales - February February - March - April
28,000 units 24,000 units 26,000 units 25,000 units
a. Compute total budgeted income for February and March. b. Find budgeted inventory at March 31 in units and dollars. c. Find budgeted purchases for March in units and dollars.
8. Lagos Company's sales budget shows the ff: estimates for the coming year: First Quarter .............. Second Quarter ......... Third Quarter ............ Fourth Quarter ..........
Unit Sales 60,000 80,000 45,000 55,000
Inventory at the beginning of the year was 18,000 units. The finished goods inventory at the end of each quarter is 30% of the next quarter's budgeted unit sales. How many units should be produced during the 1st quarter? 9. Sue Inc. expects to generate the following sales figures for the next 3 months: April Expected sales . P4,800,000
May P5,600,000
June P6,000,000
Sue's gross profit rate is 45% of total sales. Sue requires an inventory balance equal to 30% of the following month's expected sales. What peso amount of inventory should Sue plan to purchase in May? 10. Bert Company’s selling and administrative expense budget is based on budgeted unit sales. The sales budget shows 1,300 units are estimated to be sold in March. The variable selling and administrative expense is P4.20 per unit. The budgeted fixed selling and administrative expense is P19,240 per month, which includes depreciation of P3,380 per month. The remainder of the fixed selling and administrative expense represents current cash flows. What is the cash disbursements for selling and administrative expenses? 11. Rosa Inc. is working on its cash budget for July. The beginning cash balance is P46,000. Budgeted cash receipts total P175,000 and budgeted cash disbursements total P174,000. The desired ending cash balance is P50,000. What is the excess (deficiency) of cash available over disbursements for July? 12. Kree Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.
Finished goods (units) Raw material (grams) ..
Beginning Inventory 20,000 50,000
Ending Inventory 30,000 40,000
` Each unit of finished goods requires 7 grams of raw material. If the company plans to sell 270,000 units during the year, how many units would it have to manufacture during the year?
13. Based on the previous question, how much of the raw material should the company purchase during the year?
14. Dale company’s FGI is 40% of the following month’s sales. Each unit requires 3 DL hours. The budgeted labor rate for the coming year is P13 per hour. Planned sales for the months of April, May, and June are 4,000, 5,000, and 3,000 units, respectively. The budgeted direct labor cost for June for McGill Co. is $136,500. What are budgeted sales for July for Dale Company? 15. Based on the previous question, what is Dale Company’s budgeted direct labor cost for May? 16. Which of the following is not an essential feature of a budget? a. There is a clearly defined budget period. b. It is reviewed periodically to improve the figures in subsequent periods. c. It permits managers flexibility in terms of the policies that should be pursued to meet corporate objectives. d. It has been formally approved and accepted by managers as realistic. 17. With the top down budgeting approach, the budget: a. Process begins with the issuance of the general budget guidelines by top management or a budget committee. b. Developmental process centers on lower level employee participation. c. Is imposed on lower level personnel who do not want to become involved in the budget construction process in a significant way. d. Is not characterized by sound budget preparation practices. 18. Rum Company manufactures mirrors which require 8 square feet of glass per mirror. Rum anticipates production of 500 units in January, 700 units in February, and 1,700 units in March. Rum maintains glass on hand equal to 40% of the following month's anticipated production requirements. The glass costs P3 per square foot. At the beginning of January, only 500 square feet of glass is on hand. How many square feet of glass should Bright plan to buy in February? 8,800 square feet 19. In which order are the following developed? First to last: A = Production budget B = Direct materials costs budget C = Budgeted income statement D = Revenues budget 20. The primary reason that managers impose a minimum cash balance in the cash budget is: a. Because management needs discretionary cash for unforeseen business opportunities. b. Managers lack discipline to control their spending. c. That it protects the organization from uncertainty of the budgeting process. d. That it makes the financial statements look more appealing to creditors.
