Exam 5: Planning and Forecasting in a Manufacturing Setting

Milligan Manufacturing Company produces and sells garden tools.The company has developed the following production plan for its new electric trimmer. Each unit requires three feet of metal tubing.The company wishes to have ending inventory of metal tubing equal to 110% of its next month's production needs, plus an additional 100 feet.January's beginning inventory meets this requirement.Milligan's standard cost per foot is $2.80. Required Prepare the 1st quarter direct materials purchases budget for metal tubing.

The standard cost of direct material is the

The final component of the operating budget is the

Which of the following does not appear in the Other Cash Disbursements section of the Cash Budget?

Direct materials standards specify both

Jody Jewelry manufactures jewelry.It applies overhead based on direct labor hours.In October Jody is planning to make 500 rings, 400 bracelets, and 210 pendants.The company expects the total manufacturing overhead for the year would be $3,450,000 and that total direct labor hours for the year would be 75,000.Actual overhead incurred for October was $295,920.Each ring requires 6.25 hours of labor to manufacture; each bracelet requires 5.5 hours of labor to manufacture, and each pendant requires 4 hours of labor to manufacture.What is the standard overhead cost per ring?

Bottom-up budgeting is also referred to as a participative budgeting.

The predetermined overhead rate is calculated as: Budgeted Total Manufacturing Overhead divided by Budgeted Activity Level of Application Base.

Pepper Farm's intern was preparing the cash budget for June.During the month, Pepper's cash sales were $30,000 and Pepper collects 60% of credit sales during the month of sale.What was the dollar amount of Pepper's credit sales?

Which of the following is not a step in preparing the direct materials purchases budget?

One amount that the direct labor budget calculates is the number of

Which of the following is not a step in preparing the cost of goods sold budget?

If practical standards are used, the standard quantity for direct materials should not include allowances for waste and spoilage in the normal course of manufacturing.

Sara Speed requested $120,000 in her budget to cover salary expenses.However, Sara realistically expects to spend $110,000 on salaries.This is an example of

Gross profit on a pro-forma income statement is calculated as

Budgeting is ineffective unless it is tied to strategy and used to manage an organization's overall performance.

Phillip Co.manufactures decorative pillows designed for use on outdoor patios.Phillip requires that 30 percent of next month's sales be on hand at the end of each month.The following information is available regarding budgeted sales of pillows: What is budgeted production for April?

In a manufacturing setting, practical standards do not allow for

Mounce, Inc.produces and sells free-standing quilt frames.In budgeting for production needs, the company requires that 10% of the next month's sales be on hand at the end of each month.Budgeted sales of quilt frames over the next four months are: Budgeted production for October is

A company may set standards for the maximum cost that should be incurred to produce a unit of product.Such cost standards are useful