Question

17. Seventy percent of Pitkin Corporation's sales are collected in the month of sale, 20% in the month following sale, and 10% in the second month following sale. The following are budgeted sales data for the company: Budgeted sales January $200,000 February $300,000 March $350,000 April $250,000

Total budgeted cash collections in April would be:

Multiple Choice

$175,000

$275,000

$70,000

$30,000

18.Budgeted sales in Acer Corporation over the next four months are given below:

	September			October		November		December
Budgeted sales	$120,000			$140,000		$180,000		$160,000

Thirty percent of the company’s sales are for cash and 70% are on account. Collections for sales on account follow a stable pattern as follows: 50% of a month’s credit sales are collected in the month of sale, 30% are collected in the month following sale, and 20% are collected in the second month following sale. Given these data, cash collections for December should be:

Multiple Choice

• $141,800

• $100,500

• $118,700

• $161,400

19. Masde Corporation produces and sells Product CharlieD. To guard against stockouts, the company requires that 25% of the next month's sales be on hand at the end of each month. Budgeted sales of Product CharlieD over the next four months are:

	June			July		August		September
Budgeted sales in units	40,000			60,000		50,000		80,000

Budgeted production for August would be:

Multiple Choice

• 57,500 units

• 107,000 units

• 77,000 units

• 80,000 units

20. The Charade Corporation is preparing its Manufacturing Overhead budget for the fourth quarter of the year. The budgeted variable manufacturing overhead is $4 per direct labor-hour; the budgeted fixed manufacturing overhead is $79,000 per month, of which $15,400 is factory depreciation.

If the budgeted direct labor time for November is 7,400 hours, then the total budgeted manufacturing overhead for November is:

Multiple Choice

• $79,000

• $124,000

• $108,600

• $93,200

Answer 1

17

Cash from April sales (250,000*70%)	175,000
Cash from March sales (350,000*20%)	70,000
Cash from February sales (300,000*10%)	30,000
Total budgeted cash collections	275,000

Option B