Chapter 20: Q11DQ (page 913)
Apple regularly uses budgets. What is the difference between a production budget and a manufacturing budget?
A factory overhead budget is the type of budget that measures the two overhead costs, i.e., variable overhead and fixed overhead.
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
Would a manager of an Apple retail store participate more in budgeting than a manager at the corporate offices? Explain
Santos Co. is preparing a cash budget for February. The company has \(20,000 cash at the beginning of February and anticipates \)75,000 in cash receipts and \(100,250 in cash payments during February. What amount, if any, must the company borrow during February to maintain a \)5,000 cash balance? The company has no loans outstanding on February 1.
Refer to the information in Exercise 20-3. In addition, each finished unit requires five pounds of raw materials and the company wants to end each month with raw materials inventory equal to 30% of next month’s production needs., Beginning raw materials inventory for April was 663 pounds. Assume direct materials cost $4 per pound. Prepare a direct materials budget for April, May, and June.
X-Tel budgets sales of \(60,000 for April, \)100,000 for May, and \(80,000 for June. In addition, sales are 40% cash and 60% on credit. All credit sales are collected in the month following the sale. The April 1 balance in accounts receivable is \)15,000. Prepare a schedule of budgeted cash receipts for April, May, and June.
Ramos Co. provides the following sales forecast and production budget for the next four months:
The company plans for finished goods inventory of 120 units at the end of June. In addition, each finished unit requires 5 pounds of direct materials and the company wants to end each month with direct materials inventory equal to 30% of next month’s production needs. Beginning direct materials inventory for April was 663 pounds. Direct materials cost \(2 per pound. Each finished unit requires 0.50 hours of direct labor at the rate of \)16 per hour. The company budgets variable overhead at the rate of \(20 per direct labor hour and budgets fixed overhead of \)8,000 per month. Prepare a direct materials budget for April, May, and June.
What do you think about this solution?
We value your feedback to improve our textbook solutions.
