QUESTION 1

The first step in creating the master budget is the creation of the:

a.production budget.

b.direct labor budget.

c.cash budget.

d.sales budget.

e.budgeted income statement.

QUESTION 2

Omega Enterprises budgeted the following sales in units:

January

40,000

February

30,000

March

50,000

Omega's policy is to have 30% of the following month's sales in inventory. On January 1, inventory equaled 8,000 units. February production in units is:

a.20,000.

b.28,000.

c.40,000.

d.26,500.

e.36,000.

QUESTION 3

A company requires 220 pounds of plastic to meet the production needs of a product. It currently has 25 pounds of plastic inventory. The desired ending inventory of plastic is 70 pounds. How many pounds of plastic should be budgeted for purchasing during the coming period?

a.195 pounds

b.265 pounds

c.245 pounds

d.290 pounds

e.175 pounds

QUESTION 4

Excellent Company manufactures lamps. The estimated number of lamp sales for three months are as follows:

Month Sales

August 12,000

September 16,000

October 15,000

Finished goods inventory at the end of July was 3,600 units. Ending finished goods inventory is budgeted as 30% of the next month's sales. Excellent expects to sell the lamps for $30 each. In November, sales are projected at 18,000 lamps. How many lamps should be produced in September?

a.11,000 lamps

b.10,500 lamps

c.14,000 lamps

d.15,700 lamps

QUESTION 5

Movers Company manufactures sneakers. Production of their new sneaker for the coming three months is budgeted as follows:

August 28,000

September 50,000

October 33,000

Each sneaker requires 2.5 hours of direct labor time. Direct labor wages average $16 per hour. Monthly variable overhead averages $10 per direct labor hour plus fixed overhead of $4,500. What is the total overhead budgeted for the month of September?

a.$6,800,000

b.$1,254,500

c.$142,100

d.$460,000

e.$362,100