If the company plans to sell 880000 units during the

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55. If the company plans to sell 880,000 units during the year, the number of units it would have to  manufacture during the year would be: A) 900,000 units B) 930,000 units C) 880,000 units D) 830,000 units Level: Easy    LO:  3    Ans:  D 56. How much of the raw material should the company purchase during the year? Use the following information to answer 57-59 The following are budgeted data for the Bingham Company, a merchandising company: Cost of goods sold as a percentage of sales is 60%. The desired ending inventory is 75% of next month’s  sales. 57. Assuming that the Bingham Company had inventory on hand of $70,000 (at cost) on January 1, the  purchases for January (at cost) would be: 58. The desired ending inventory (at cost) for the month of February would be: Brewer, Introduction to Managerial Accounting, 3/e 120
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59. Assume that all purchases are paid for in the month following the month of purchase. The cash  disbursements for purchases that would appear in the April cash budget would be: A) $180,000 B) $157,500 C) $240,000 D) $217,500 Level: Medium    LO:  3    Ans:  D Use the following information to answer 60-61 LFM Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 3.5  hours of direct labor at the rate of $16.00 per direct labor-hour. Management would like you to prepare a  Direct Labor Budget for June. 60. The budgeted direct labor cost per unit of Product WZ would be: 61. The company plans to sell 31,000 units of Product WZ in June. The finished goods inventories on  June 1 and June 30 are budgeted to be 100 and 600 units, respectively. Budgeted direct labor costs for  June would be: Use the following information to answer 62-63 Marty’s Merchandise has budgeted sales as follows for the second quarter of the year: Cost of goods sold is equal to 70% of sales. The company wants to maintain a monthly ending inventory  equal to 120% of the cost of goods sold for the following month. The inventory on March 31 was below  this target and was only $22,000. The company is now preparing a Merchandise Purchases Budget for  April, May, and June.
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  • Fall '12
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