BUSINESS

1.     The Willsey Merchandise Company has budgeted $40,000 in sales for the month of December. The company’s cost of goods sold is 30% of sales. If the company has budgeted to purchase $18,000 in merchandise during December, then the budgeted change in inventory levels over the month of December is:
A. $6,000 increase
B. $10,000 decrease
C. $22,000 decrease
D. $15,000 increase

2.     Sam’s Toys budgeted sales of $300,000 for the month of November and cost of goods sold equal to 80% of sales. Beginning inventory for November was $50,000 and ending inventory for November is estimated at $55,000. How much are the budgeted purchases for November?

A) $245,000

B) $65,000

C) $235,000

D) $135,000

 

 

3.     BusyBody Company expects its November sales to be 20% higher than its October sales of $180,000. Purchases were $110,000 in October and are expected to be $160,000 in November. All sales are on credit and are collected as follows: 35% in the month of the sale and 60% in the following month. Purchases are paid 40% in the month of purchase and 60% in the following month. The cash balance on November 1 is $13,500. The cash balance on November 30 will be

A) $4,100.

B) $53,600.

C) $67,100.

D) $40,100.

 

 

 

 

Cave Hardware’s forecasted sales for April, May, June, and July are $200,000, $230,000, $190,000, and $240,000, respectively. Sales are 65% cash and 35% credit with all accounts receivables collected in the month following the sale. Cost of goods sold is 75% of sales and ending inventory is maintained at $60,000 plus 10% of the following month’s cost of goods sold. All inventory purchases are paid 22% in the month of purchase and 78% in the following month.

 

4.     What are the cash collections budgeted for June?

A) $150,500

B) $193,500

C) $123,500

D) $204,000

 

 

5.     What are the budgeted cash payments in June for inventory purchases?

A) $495,000

B) $315,750

C) $164,385

D) $167,415

 

 

6.     What is the balance of accounts payable on the June 30 budgeted balance sheet?

A) $32,175

B) $108,225

C) $146,250

D) $114,075

 

 

 

 

 

 

 

 

 

7.     Friden Company has budgeted sales and production over the next quarter as follows:

The company has 20,000 units of product on hand at April 1. A minimum of 20% of the next month’s sales needs in units must be on hand at the end of each month. July sales are expected to be 140,000 units. Budgeted sales for June would be (in units):
A. 188,000
B. 160,000
C. 128,000
D. 184,000

 

Nittany Company sells three products with the following seasonal sales pattern:

 

Products

Quarter                 A       B       C

1        40%  30%  10%

2        30%  20%  40%

3        20%  20%  40%

4        10%  30%  10%

 

The annual sales budget shows forecasts for the different products and their expected selling price per unit as follows:

 

Product       Units Selling Price

A       50,000        $ 8

B       125,000      20

C       62,500        12

 

8.     A sales budget for the First quarter will show total revenue of

A) $ 400,000

B) $985,000

C) $3650,000

D) None of the above.

 

9.     A sales budget for the year will show total revenue of

A) $ 4000,000

B) $237,500

C) $3650,000

D) None of the above.

 

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