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52.The Tobler Company had budgeted production for the year as follows:Four pounds of raw materials are required for each unit produced. Raw materials on hand at the start of the year total 4,000 lbs. The raw materials inventory at the end of each quarter should equal 10% of the next quarter's production needs in materials. Budgeted purchases of raw materials in the second quarter would be (in lbs.) A. 48,000 lbs.B. 46,400 lbs.C.49,600 lbs.D. 54,400 lbs.12,000 × 4 = 48,000; 48,000 + (16,000 × 4 × .10) - (48,000 × .10) = 49,600AACSB: AnalyticAICPA: FN-Decision MakingBlooms: AnalysisDifficulty: MediumLanen - Chapter 13 #52Learning Objective: 4Topic Area: Forecasting Production Costs
53.Kaufman Industries has just completed its sales forecasts and its marketing department estimates that the company will sell 36,000 units during the upcoming year. In the past, management has maintained inventories of finished goods at approximately three months' sales. However, the estimated inventory at the start of the year of the budget period is only 6,000 units. Sales occur evenly throughout the year. What is the estimated production level (units) for the first month of the upcoming budget year? AACSB: AnalyticAICPA: FN-Decision MakingBlooms: AnalysisDifficulty: MediumLanen - Chapter 13 #53Learning Objective: 4Topic Area: Forecasting ProductionThe Sun Company manufactures a special line of graphic tubing items. The company estimates it will sell 75,000 units of this item in 2008. The beginning finished goods inventory contains 20,000 units. The target for each year's ending inventory is 10,000 units.Each unit requires five feet of plastic tubing. The tubing inventory currently includes 70,000 feet of the required tubing. Materials on hand are targeted to equal three month's production. Any shortage in materials will be made up by the immediate purchase of materials. Sales take place evenly throughout the year.Lanen - Chapter 1354.What is the production budget (in units) for 2008? AACSB: AnalyticAICPA: FN-Decision MakingBlooms: AnalysisDifficulty: EasyLanen - Chapter 13 #54Learning Objective: 4Topic Area: Forecasting Production
55.What are the materials requirements (in feet) for 2008? A. 313,750B.336,250C. 363,750D. 386,25065,000 × 5 = 325,000; 325,000 + (325,000/12 × 3) - 70,000 = 336,250AACSB: AnalyticAICPA: FN-Decision MakingBlooms: AnalysisDifficulty: MediumLanen - Chapter 13 #55Learning Objective: 4Topic Area: Forecasting Production Needs56.The following budgeted information is provided:One pound of material is required for each finished unit. The inventory of materials at the end of each month should equal 20% of the following month's production needs. At the beginning of Month 1, there was 3,200 lbs. of materials on hand. Purchases of raw materials for Month 1 would be (in pounds) A. 25,000.B. 23,400.C.17,200.D. 22,000.16,000 + (22,000 × .20) - (3,200) = 17,200AACSB: AnalyticAICPA: FN-Decision MakingBlooms: AnalysisDifficulty: MediumLanen - Chapter 13 #56Learning Objective: 4Topic Area: Forecasting Production Costs
57.Davis Corporation had the following transactions in their first year of operations:What is the cash balance at year end?