Econ
Acct 2302
Chapter 9 Sample Exam Questions
Exercise 184
Coliseum Company has budgeted the following unit sales: Quarter
Units
Qtr. 1, 2006
60,000
Qtr. 2, 2006
50,000
Qtr. 3, 2006
40,000
Qtr. 4, 2006
80,000
The finished goods inventory on hand on December 31, 2005 was 6,000 units. It is the company's policy to maintain a finished goods inventory at the end of each quarter equal to 10% of the next quarter's anticipated sales.
Instructions
Prepare a production budget for the second quarter of 2006.
Solution Exercise 184 (7–10 min.)
Coliseum Company
Production Budget
For the Quarter Ended June 30, 2006
Expected unit sales
50,000
Desired ending finished goods units (10% x 40,000) 4,000
Total required units
54,000
Less: Beginning finished goods units (10% x 50,000) 5,000
Required production units
49,000
Brief Exercise 168
The budget components for McLeod Company for the quarter ended June 30 appear below. McLeod sells trash cans for $12 each. Budgeted sales and production of trash cans for the next four months are:
Sales
Production
April
20,000 units
26,000 units
May
50,000 units
46,000 units
June
30,000 units
29,000 units
July
25,000 units
20,000 units
McLeod desires to have trash cans on hand at the end of each month equal to 20 percent of the following month’s budgeted sales in units. On March 31, McLeod had 4,000 completed units on hand. The number of trashcans to be produced in April and May are 26,000 and 46,000, respectively. Seven pounds of plastic are required for each trash can. At the end of each month, McLeod desires to have 10 percent of the following month’s production material needs on hand. At March 31, McLeod had 18,200 pounds of plastic on hand. The material used in production costs $0.60 per pound. Each trashcan produced requires 0.10 hours of direct labor. Determine how much the materials purchases budget will be for the month ending April 30.
Solution Brief Exercise
Chapter 9 Sample Exam Questions
Exercise 184
Coliseum Company has budgeted the following unit sales: Quarter
Units
Qtr. 1, 2006
60,000
Qtr. 2, 2006
50,000
Qtr. 3, 2006
40,000
Qtr. 4, 2006
80,000
The finished goods inventory on hand on December 31, 2005 was 6,000 units. It is the company's policy to maintain a finished goods inventory at the end of each quarter equal to 10% of the next quarter's anticipated sales.
Instructions
Prepare a production budget for the second quarter of 2006.
Solution Exercise 184 (7–10 min.)
Coliseum Company
Production Budget
For the Quarter Ended June 30, 2006
Expected unit sales
50,000
Desired ending finished goods units (10% x 40,000) 4,000
Total required units
54,000
Less: Beginning finished goods units (10% x 50,000) 5,000
Required production units
49,000
Brief Exercise 168
The budget components for McLeod Company for the quarter ended June 30 appear below. McLeod sells trash cans for $12 each. Budgeted sales and production of trash cans for the next four months are:
Sales
Production
April
20,000 units
26,000 units
May
50,000 units
46,000 units
June
30,000 units
29,000 units
July
25,000 units
20,000 units
McLeod desires to have trash cans on hand at the end of each month equal to 20 percent of the following month’s budgeted sales in units. On March 31, McLeod had 4,000 completed units on hand. The number of trashcans to be produced in April and May are 26,000 and 46,000, respectively. Seven pounds of plastic are required for each trash can. At the end of each month, McLeod desires to have 10 percent of the following month’s production material needs on hand. At March 31, McLeod had 18,200 pounds of plastic on hand. The material used in production costs $0.60 per pound. Each trashcan produced requires 0.10 hours of direct labor. Determine how much the materials purchases budget will be for the month ending April 30.
Solution Brief Exercise