In preparing the direct materials budget for Quan Company, management concludes that required purchases are 64,000 units. If 52,000 direct materials units are required in production and there are 9,000 units of beginning direct materials, what is the desired units of ending direct materials?

Determine whether each of the following costs should be classified as direct materials (DM), direct labor (DL), or manufacturing overhead (MO). (a) ______ Frames and tires used in manufacturing bicycles.

Determine whether each of the following costs should be classified as direct materials (DM), direct labor (DL), or manufacturing overhead (MO). (d) ______ Depreciation on factory equipment.

Sanlax, Inc., creates portable appliances and develops plans using an annual budgeting cycle. For next year, the production budget is 400,000 units. Inventories are expected to increase by 20,000 units.

Required
What is the sales budget for the coming year?

What is a self-imposed budget? What are the major advantages of self-imposed budgets? What caution must be exercised in their use?

Cameron Parts has the following information from year 1 operations, which are to be used for developing year 2 budget estimates:

All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of$14,550 will be replaced in year 2 with new equipment that will incur an annual depreciation charge of $21,000. Sales volume and prices are expected to increase by 12 percent and 6 percent, respectively. On a per-unit basis, expectations are that materials costs will increase by 10 percent and variable manufacturing costs will decrease by 4 percent. Fixed manufacturing costs are expected to decrease by 7 percent.

Variable marketing costs will change with volume. Administrative cash costs are expected to increase by 8 percent. Inventories are kept at zero. Cameron operates on a cash basis.

Required
Prepare a budgeted income statement for year 2.

Clopack Company manufactures one product that goes through one processing department called Mixing. All raw materials are introduced at the start of work in the Mixing Department. The company uses the weighted-average method of process costing. Its Work in Process T-account for the Mixing Department for June follows (all forthcoming questions pertain to June):

$$\begin{array}{c} \textbf{Work in Process - Mixing Department} \end{array}$$

$$\begin{array}{l r | l r}\hline \text{June 1 balance} & 28,000 & \text{Completed and transferred} & \\ \text{Materials} & 120,000 & \text{to Finished Goods} & ?\\ \text{Direct labor} &79,500 & \\ \text{Overhead} &97,000& \\ \hline \text{June 30 balance} &? \end{array}$$

The June 1 work in process inventory consisted of 5,000 units with $16,000 in materials cost and$12,000 in conversion cost. The June 1 work in process inventory was $100 complete with respect to materials and$50 complete with respect to conversion. During June, 37,500 units were started into production. The June 30 work in process inventory consisted of 8,000 units that were $100 complete with respect to materials and$40 complete with respect to conversion.

Required:

What is the amount of conversion cost transferred to finished goods?

Silver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak sales occur in May of each year, as shown in the company’s sales budget for the second quarter given below:

From past experience, the company has learned that $20\%$ of a month’s sales are collected in the month of sale, another $70\%$ are collected in the month following sale, and the remaining $10\%$ are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $\$230,000,$ and March sales totaled $\$260,000$. Required:

1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.
2. Assume that the company will prepare a budgeted balance sheet as of June $30.$ Compute the accounts receivable as of that date.

Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year, as shown in the company's sales budget for the second quarter given below:

$$\begin{array}{lcccc} & \textbf{April} & \textbf{May} & \textbf{June} & \textbf{Total} \\ \\ \text{Budgeted sales (all on account)} & \$300,000 & \$500,000 & \$200,000 & \$1,000,000\\ \end{array}$$

From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled$260,000.

Required:

1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.

2. What is the accounts receivable balance on June 30th?

Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year, as shown in the company's sales budget for the second quarter given below:

$$\begin{matrix} \text{ } & \text{April} & \text{May} & \text{June} & \text{Total}\\ \text{Budgeted sales (all on account)} & \text{\$ 300.000} & \text{\$ 500.000} & \text{\$ 200.000} & \text{\$ 1.000.000}\\ \end{matrix}$$

From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled$260,000. 1. Prepare a schedule of expected cash collections from sales. by month and in total, for the second quarter. 2. Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.

Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows:

The company’s beginning cash balance for the upcoming fiscal year will be $20,000. The company requires a minimum cash balance of$10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded.

Required:

Prepare the company’s cash budget for the upcoming fiscal year.

Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year, as shown in the company's sales budget for the second quarter given below:

$$\begin{array}{ccccc} & \text { April } & \text { May } & \text { June } & \text { Total } \\ \text { Budgeted sales (all on account) ......... } & \$ 300,000 & \$ 500,000 & \$ 200,000 & \$ 1,000,000\end{array}$$

From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled$260,000.

Required:

1. Using Schedule 1 as your guide, prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.

2. What is the accounts receivable balance on June 30th?

Which of the following is an example of manufacturing overhead expense in a factory?

A. Wages of machine operators

B. Wages of factory maintenance personnel

C. Salaries of salespersons

D. Wages of administrators in the corporate office

The sum of direct materials and direct labor is called $\underline{\hspace{20pt}}$ cost.