201. Molina Company has the following sales forecast for the next quarter: April, 20,000 units; May, 24,000 units; June, 28,000 units. Sales totaled 16,000 units in March. The March finished goods inventory was 4,000 units. End-ofmonth finished goods inventory levels are planned to be equal to 20 percent of the next month's planned sales.
The planned ending inventory of finished goods for May is
a. 5,600 units
b. 4,000 units
c. 5,000 units
d. 3,200 units
28,000 × 0.20 = 5,600 units
202. Molina Company has the following sales forecast for the next quarter: April, 20,000 units; May, 24,000 units; June, 28,000 units. Sales totaled 16,000 units in March. The March finished goods inventory was 4,000 units. End-ofmonth finished goods inventory levels are planned to be equal to 20 percent of the next month's planned sales.
The planned production for Ben Company for April is
a. 19,200 units
b. 20,800 units
c. 21,200 units
d. 24,800 units
20,000 + (0.20 × 24,000) – 4,000 = 20,800 units
203. The following forecasted sales pertain to Alicia Company:
Month Sales
April $200,000
May 250,000
June 150,000
July 100,000
Finished goods inventory as of March 31 4,000 units
The company has a selling price of $20 per unit and expects to maintain ending inventories equal to 20 percent of the next month's sales.
How many units are expected to be produced in April?
a. 8,500 units
b. 12,500 units
c. 14,500 units
d. 10,500 units
($200,000/$20) + [($250,000/$20) × 0.2] – 4,000 = 8,500 units
204. The following forecasted sales pertain to Rapid City:
Month Sales
June $160,000
July 200,000
August 120,000
September 80,000
Finished goods inventory as of May 31 6,000 units
Rapid City has a selling price of $5 per unit and expects to maintain ending inventories equal to 25 percent of next month's sales.
How many units are expected to be produced in June?
a. 36,000 units
b. 50,000 units
c. 82,000 units
d. 42,000 units
$160,000/$5 + [($200,000/$5) × 0.25] – 6,000 = 36,000 units
205. Alana Company manufactures books. Manufacturing a book takes 10 units of A1 and 1 unit of A2. Scheduled production of books for the next two months is 1,000 and 1,200 units, respectively. Beginning inventory is 4,000 units of A1 and 30 units of A2. The ending inventory of A1 is planned to decrease 500 units in each of the next two months, and the A2 inventory is expected to increase 5 units in each of the next two months.
How many units of A1 does Alana Company expect to use in production during the second month?
a. 12,000 units
b. 12,500 units
c. 10,000 units
d. 10,750 units
1,200 × 10 = 12,000 units
206. Alana Company manufactures books. Manufacturing a book takes 10 units of A1 and 1 unit of A2. Scheduled production of books for the next two months is 1,000 and 1,200 units, respectively. Beginning inventory is 4,000 units of A1 and 30 units of A2. The ending inventory of A1 is planned to decrease 500 units in each of the next two months, and the A2 inventory is expected to increase 5 units in each of the next two months.
How many units of A2 are expected in the raw material inventory at the end of the second month?
a. 30 units
b. 45 units
c. 40 units
d. 35 units
30 + 5 + 5 = 40 units
207. Foremost Corporation manufactures boxes. The estimated number of boxes sold for the first three months of 2016 are:
Month Sales
January 3,000
February 4,200
March 3,900
Finished goods inventory at the end of December was 900 units. Ending finished goods inventory is equal to 20 percent of the next month's sales. General Corporation expects to sell the boxes for $5 each. April 2016 sales is projected at 4,500 boxes.
What is the expected sales revenue for March?
a. $15,000
b. $21,000
c. $19,500
d. $4,500
3,900 × $5 = $19,500
208. Foremost Corporation manufactures boxes. The estimated number of boxes sold for the first three months of 2016 are as follows:
Month Sales
January 3,000
February 4,200
March 3,900
Finished goods inventory at the end of December was 900 units. Ending finished goods inventory is equal to 20 percent of the next month's sales. General Corporation expects to sell the boxes for $5 each. April 2016 sales is projected at 4,500 boxes.
How many boxes should be produced in February?
a. 4,140 boxes
b. 4,200 boxes
c. 4,260 boxes
d. 3,900 boxes
4,200 + (0.20 × 3,900) – (0.20 × 4,200) = 4,140 boxes
209. Foremost Corporation manufactures boxes. The estimated number of boxes sold for the first three months of 2016 are as follows:
Month Sales
January 3,000
February 4,200
March 3,900
Finished goods inventory at the end of December was 900 units. Ending finished goods inventory is equal to 20 percent of the next month's sales. General Corporation expects to sell the boxes for $5 each. April 2016 sales is projected at 4,500 boxes.
How many boxes should be produced in January?
a. 3,060 boxes
b. 2,940 boxes
c. 3,000 boxes
d. 3,840 boxes
(0.20 × 4,200) + 3,000 – 900 = 2,940 boxes
210. Moriah Manufacturing Company expects to incur the following per unit costs for 1,000 units of production:
Direct materials 3 lb. @ $5 = $15
Direct labor 1 hr @ $6 = $6
Variable overhead 75% of direct labor costs
Fixed overhead 50% of direct labor costs
What is the total amount of direct labor included in the direct labor budget?
a. $6,000
b. $28,500
c. $6
d. $7,500
$6 × 1,000 = $6,000
The planned ending inventory of finished goods for May is
a. 5,600 units
b. 4,000 units
c. 5,000 units
d. 3,200 units
28,000 × 0.20 = 5,600 units
202. Molina Company has the following sales forecast for the next quarter: April, 20,000 units; May, 24,000 units; June, 28,000 units. Sales totaled 16,000 units in March. The March finished goods inventory was 4,000 units. End-ofmonth finished goods inventory levels are planned to be equal to 20 percent of the next month's planned sales.
The planned production for Ben Company for April is
a. 19,200 units
b. 20,800 units
c. 21,200 units
d. 24,800 units
20,000 + (0.20 × 24,000) – 4,000 = 20,800 units
203. The following forecasted sales pertain to Alicia Company:
Month Sales
April $200,000
May 250,000
June 150,000
July 100,000
Finished goods inventory as of March 31 4,000 units
The company has a selling price of $20 per unit and expects to maintain ending inventories equal to 20 percent of the next month's sales.
How many units are expected to be produced in April?
a. 8,500 units
b. 12,500 units
c. 14,500 units
d. 10,500 units
($200,000/$20) + [($250,000/$20) × 0.2] – 4,000 = 8,500 units
204. The following forecasted sales pertain to Rapid City:
Month Sales
June $160,000
July 200,000
August 120,000
September 80,000
Finished goods inventory as of May 31 6,000 units
Rapid City has a selling price of $5 per unit and expects to maintain ending inventories equal to 25 percent of next month's sales.
How many units are expected to be produced in June?
a. 36,000 units
b. 50,000 units
c. 82,000 units
d. 42,000 units
$160,000/$5 + [($200,000/$5) × 0.25] – 6,000 = 36,000 units
205. Alana Company manufactures books. Manufacturing a book takes 10 units of A1 and 1 unit of A2. Scheduled production of books for the next two months is 1,000 and 1,200 units, respectively. Beginning inventory is 4,000 units of A1 and 30 units of A2. The ending inventory of A1 is planned to decrease 500 units in each of the next two months, and the A2 inventory is expected to increase 5 units in each of the next two months.
How many units of A1 does Alana Company expect to use in production during the second month?
a. 12,000 units
b. 12,500 units
c. 10,000 units
d. 10,750 units
1,200 × 10 = 12,000 units
206. Alana Company manufactures books. Manufacturing a book takes 10 units of A1 and 1 unit of A2. Scheduled production of books for the next two months is 1,000 and 1,200 units, respectively. Beginning inventory is 4,000 units of A1 and 30 units of A2. The ending inventory of A1 is planned to decrease 500 units in each of the next two months, and the A2 inventory is expected to increase 5 units in each of the next two months.
How many units of A2 are expected in the raw material inventory at the end of the second month?
a. 30 units
b. 45 units
c. 40 units
d. 35 units
30 + 5 + 5 = 40 units
207. Foremost Corporation manufactures boxes. The estimated number of boxes sold for the first three months of 2016 are:
Month Sales
January 3,000
February 4,200
March 3,900
Finished goods inventory at the end of December was 900 units. Ending finished goods inventory is equal to 20 percent of the next month's sales. General Corporation expects to sell the boxes for $5 each. April 2016 sales is projected at 4,500 boxes.
What is the expected sales revenue for March?
a. $15,000
b. $21,000
c. $19,500
d. $4,500
3,900 × $5 = $19,500
208. Foremost Corporation manufactures boxes. The estimated number of boxes sold for the first three months of 2016 are as follows:
Month Sales
January 3,000
February 4,200
March 3,900
Finished goods inventory at the end of December was 900 units. Ending finished goods inventory is equal to 20 percent of the next month's sales. General Corporation expects to sell the boxes for $5 each. April 2016 sales is projected at 4,500 boxes.
How many boxes should be produced in February?
a. 4,140 boxes
b. 4,200 boxes
c. 4,260 boxes
d. 3,900 boxes
4,200 + (0.20 × 3,900) – (0.20 × 4,200) = 4,140 boxes
209. Foremost Corporation manufactures boxes. The estimated number of boxes sold for the first three months of 2016 are as follows:
Month Sales
January 3,000
February 4,200
March 3,900
Finished goods inventory at the end of December was 900 units. Ending finished goods inventory is equal to 20 percent of the next month's sales. General Corporation expects to sell the boxes for $5 each. April 2016 sales is projected at 4,500 boxes.
How many boxes should be produced in January?
a. 3,060 boxes
b. 2,940 boxes
c. 3,000 boxes
d. 3,840 boxes
(0.20 × 4,200) + 3,000 – 900 = 2,940 boxes
210. Moriah Manufacturing Company expects to incur the following per unit costs for 1,000 units of production:
Direct materials 3 lb. @ $5 = $15
Direct labor 1 hr @ $6 = $6
Variable overhead 75% of direct labor costs
Fixed overhead 50% of direct labor costs
What is the total amount of direct labor included in the direct labor budget?
a. $6,000
b. $28,500
c. $6
d. $7,500
$6 × 1,000 = $6,000
