Question

1.If budgeted beginning inventory is $8,950, budgeted ending inventory is $10,180, and budgeted cost of goods sold is $10,910, budgeted purchases should be:

Multiple Choice

• $1,230

• $1,960

• $12,140

• $9,680

• $730

2.Ratchet Manufacturing's August sales budget calls for sales of 5,000 units. Each month's unit sales are expected to grow by 4%. The product selling price is $20 per unit. The expected total sales dollars for September's sales budget are:

Multiple Choice

• $100,000.

• $96,000.

• $104,000.

• $108,000.

• $5,200.
  
  
  3 Question -

  Flagstaff Company has budgeted production units of 9,300 for July and 9,500 for August. The direct materials requirement per unit is 2 ounces (oz.). The company has determined that it wants to have safety stock of direct materials on hand at the end of each month to complete 30% of the units of budgeted production in the following month. There was 5,580 ounces of direct material in inventory at the start of July. The total cost of direct materials purchases for the July direct materials budget, assuming the materials cost $1.20 per ounce, is:

  Multiple Choice

• $22,464.

• $29,160.

• $15,624.

• $22,176.

• $22,320.

Answer 1

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ANS: 1 Budge Amount in $ Budgeted perechase world be: $12,140 Worysings * Beginning inventory $ 8950 Ending inventory • $ 10,180 To cost of Goods Solm ; $ 10,910 formula for "cost of Goods solat" = Beginning inventory i purchaie - Ending inventory or $ 10,910 = $ 8950 to purchase - $ 10, 180 on purchase = $10,910 - $ 8950 4519180 . purehase = $ 12,140 2. Expected total sales dollar for septembents sales budget budget ame a $ 104000 Working: to Budgered sare fore August = 5000 units.. y Annual growth rate : 44 & product selling price = $20

Hence, Budgetech sale for September = 5100+(5000 $47:) = 5200 units: Expected total sales dollar for september = 5200 units X $20 = $ 104000 TOLAR cost af dinect material purchasech for July = $ 22,464 Werkings a Budgeteor production for gury = 9300 units t 11 " " August 9500 units * Direct material required pen unit = 2 ounces Safery- ☆ stock of Direct material = 30% of next month budget produwtion: * Opening stock on Juny = 5580 units Direer material parechased for July = (safety stock for August & purchase for a (production of Jury - safety stovk for July) X Smarenial cast on 119.500 x 2 ounces X 304.) +19300 X 2 ounces ) - 55607 L·20 DE (5700 + 18600 – 5580) $1.2 on $22.464
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