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Master Budget.6

This document contains a master budget with multiple problems/questions related to budgets for various companies. It includes budget details like: - Ferbel Company's 1983 budgeted total manufacturing costs - Factory overhead rate based on direct labor hours - Budji Corp.'s budgeted sales, costs, expenses, and net income for 19B - Karmel Inc.'s budgeted sales amounts for different months and calculation of sales commissions paid out in October - Del Co.'s budget assumptions for the next year around sales units, prices, costs, expenses, inventory amounts, and projected operating income.

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Hiraya Manawari
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598 views1 page

Master Budget.6

This document contains a master budget with multiple problems/questions related to budgets for various companies. It includes budget details like: - Ferbel Company's 1983 budgeted total manufacturing costs - Factory overhead rate based on direct labor hours - Budji Corp.'s budgeted sales, costs, expenses, and net income for 19B - Karmel Inc.'s budgeted sales amounts for different months and calculation of sales commissions paid out in October - Del Co.'s budget assumptions for the next year around sales units, prices, costs, expenses, inventory amounts, and projected operating income.

Uploaded by

Hiraya Manawari
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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MASTER BUDGET

PROBLEMS
11. Based on the above information, the budgeted total manufacturing costs for Ferbel
Company for the year 1983 would be
a. P51,040 b. P60,800 c. P68,800 d. P76,560

12. The factory overhead rate based on direct labor hours would be
a. P0.67 per direct labor hour c. P2.16 per direct labor hour
b. P1.80 per direct labor hour d. P2.70 per direct labor hour
xxx
13. Budji Corp. is preparing its budget for 19B. For 19A, the following were reported:
Sales (100,000 units) P1,000,000
Cost of Goods Sold 600,000
Gross Profit P 400,000
Operating Expenses (including depreciation of P40,000) 240,000
Net Income P 160,000
Selling prices will increase by 10% and sales volume in units will decrease by 5%. The cost of
goods sold as a percent of sales will increase to 62%. Other than depreciation, all operating costs
are variable. Budji will budget a net income for 19B of
a. P167,100 b. P167,500 c. P168,000 d. P176,000

14. Karmel, Inc. pays out sales commissions to its sales team in the month the company
receives cash for payment. These commissions equal 5% of total (monthly) cash inflows as a
result of sales. Karmel has budgeted sales of $300,000 for August, $400,000 for September, and
$200,000 for October. Approximately, half of all sales are on credit, and the other half are all
cash sales. Experience indicates that 70% of the budgeted credit sales will be collected in the
month following the sale, 20% the month after that, and 10% of the sales will be uncollectible.
Based on this information, what should be the total amount of sales commissions paid out by
Karmel in the month of October?
a. $8,500 b. $13,500 c. $17,000 d. $22,000
xxx
15. It is budgeting time for Del Co. The following assumptions were agreed upon for the
next year after a strategic planning session which covered a five-year horizon
1. Sales is estimated to be at 70,000 units at its national selling price of P126.00. 75% of
total sales are on credit. 1.5% of net sales is provided for doubtful accounts.
2. Sales discounts are given to various customers at different rates and net to gross ratio is at
93%
3. Mark-up on merchandise is at 45% of invoice cost. Beginning inventory is P80,900 and
is expected to be reduced by P15,000 at the end of the period.
4. Selling and administrative expenses is expected to be 15% of gross sales.
5. Depreciation is computed at P500,000.
The projected operating income for the year is
a. P252,741 b. P296,841 c. P252,341 d. P173,802

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