Chapter 7& no answers.docx, Exercises of Management Accounting

Download Chapter 7& no answers.docx and more Exercises Management Accounting in PDF only on Docsity! Chapter 7: Master Budget 1.Benjamin Company has the following data: Month Budgeted Sales January $108,000 February 132,000 March 144,000 April 120,000 Cost of goods sold average 60% of sales. The inventory at December 31 was $19,440. Desired ending inventory levels are 20% of next month's sales at cost. What is the desired ending inventory value at February 28? A) $15,840 B) $17,280 C) $26,400 D) $28,800 Answer: B Feb=20%x60%x144000=17280 2.Downstairs Company has the following sales budget for the last six months of 2022: July $100,000 August 80,000 September 110,000 October 80,000 November 100,000 December 94,000 Historically, the cash collection of sales has been as follows: 65% of sales collected in month of sale 25% of sales collected in month following sale 8% of sales collected in second month following sale 2% of sales uncollectible What are the expected cash collections of sales in October? A) $79,500 B) $85,900 C) $92,400 D) $99,500 Answer: B Oct=0.65x80,000=52,000 0.25x80,000=27,500 0.8x100,000=6400………………85,900 3.Harrison Company has the following information: Month Budgeted Sales June $68,000 July 72,000 August 74,000 September 76,000 October 78,000 1 The cost of goods sold percentage is 65% and the desired ending inventory level is 25% of next month's sales. What is the total purchases at August: A)$40,000 B) 38,425 C)48,425 D) 30,000 Answer :C 4.Carlton Company has the following information Month Budgeted Purchases January $230,000 February 190,000 March 200,000 April 220,000 May 210,000 Purchases are paid for in the following manner: 10% in the same month of purchase 80% in the month following 10% in the months following What is the total purchase disbursement for March A) $179,500 B) $185,900 C) $192,400 D) $195,000 Answer: D 5.Sebring Company has the following data: Month Budgeted Sales April $40,000 May 44,000 June 50,000 July 52,000 August 48,000 The cost of goods sold percentage is 70% of sales and the desired ending inventory level is 25% of next month's sales at cost. ________ was the beginning inventory on May 1. A) $3,300 B) $7,700 C) $8,750 D) $11,000 Answer: B 6.Month Budgeted Sales May $46,000 June 50,000 July 52,000 2