Question : Answer the following questions using the information below: Wallace Company : 1212103

 

Answer the following questions using the information below:

 

Wallace Company provides the following data for next year:

 

MonthBudgeted Sales

January$120,000

February108,000

March132,000

April144,000

 

The gross profit rate is 35% of sales. Inventory at the end of December is $21,600 and target ending inventory levels are 20% of next month’s sales, stated at cost.

 

45) What is the amount of purchases budgeted for January?

A) $63,960

B) $70,440

C) $78,000

D) $92,040

 

46) What is the amount of purchases budgeted for February?

A) $32,214

B) $70,200

C) $73,320

D) $95,160

Answer the following questions using the information below:

 

Shamokin Manufacturing produces a Tourbillon watch movement called OM362. Shamokin expects to sell 10,000 units of OM362 and to have an ending finished inventory of 2,000 units. Currently, it has a beginning finished inventory of 800 units. Each unit of OM362 requires two labor operations, one labor hour of assembling and two labor hours of polishing. The direct labor rate for assembling is $10 per assembling hour and the direct labor rate for polishing is $12.50 per polishing hour.

 

47) The expected number of hours of direct labor for OM362 Bigger is ________.

A) 8,800 hours of assembling; 17,600 hours of polishing

B) 11,200 hours of assembling; 22,400 hours of polishing

C) 17,600 hours of assembling; 8,800 hours of polishing

D) 22,400 hours of assembling; 11,200 hours of polishing

 

48) The expected cost of direct labor for OM362 is ________.

A) $350,000

B) $378,000

C) $392,000

D) $420,000

 

49) Juan Sugita Manufacturing expects to produce and sell 12,000 units of Big, its only product, for $20 each. Direct material cost is $3 per unit, direct labor cost is $10 per unit, and variable manufacturing overhead is $6 per unit. Fixed manufacturing overhead is $24,000 in total. Variable selling and administrative expenses are $1 per unit, and fixed selling and administrative costs are $3,000 in total. According to generally accepted accounting principles, inventoriable cost per unit of Big would be ________.

A) $13.00 per unit

B) $14.00 per unit

C) $21.00 per unit

D) $18.50 per unit

50) The use of activity-based budgeting is growing because of ________.

A) the increased use of activity-based costing

B) the increased use of kaizen costing

C) increases in work-in-process inventory

D) increases in direct materials inventory

 

51) Activity-based budgeting would separately estimate ________.

A) the cost of overhead for a department

B) a plant-wide cost-driver rate

C) the cost of a setup activity

D) All of these answers are correct.

 

52) Activity-based-costing analysis makes no distinction between ________.

A) direct-materials inventory and work-in-process inventory

B) short-run variable costs and short-run fixed costs

C) parts of the supply chain

D) components of the value chain

 

53) Activity-based budgeting makes it easier to ________.

A) determine a rolling budget

B) prepare pro forma financial statements

C) determine how to reduce costs

D) execute a financial budget

 

54) Which of the following statements is true about activity-based budgeting?

A) activity-based budgeting estimates total costs more accurately than cost-based budgeting

B) activity-based budgeting provides more detailed information than cost-based budgeting

C) activity-based budgeting is cheaper than cost-based budgeting

D) activity-based budgeting is simpler to implement than cost-based budgeting

 

 

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