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LETTER C
THEORY – FIVE
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Budgetary slack can be described best as:
a. The elimination of certain expenses to enchance budgeted
income
b. The planned overestimation of budgeted expenses
c. A plug number used to achieve a present level of
operating income
d. The planned underestimation of budgeted expenses
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LETTER B
PROBLEM 1 - ONE
Ying Company plans to sell 200,000 units of finished product
in October and anticipates a growth rate in sales of 5% per
month. The desired monthly ending inventory in units of
finished product is 80% of the next month's estimated sales.
There are 150,000 finished units in the inventory on
September 30.
665, 720
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PROBLEM 1 - TWO
Candace Company produces and sells pillows. It expects to
sell 10,000 pillows in the year 2012 and had 1,000 pillows in
finished goods inventory at the end of 2011. Candace would
like to complete operations in the year 2012 with at least
1,250 completed pillows in inventory. There is no ending
work-in-process inventory. The pillows sell for $5 each. How
many pillows would be produced in the year 2012
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PROBLEM 1 - THREE
Saphire Company budgeted the following production in units for
the second quarter of the year:April 45,000; May -38,000; June -
42,000
156,800
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PROBLEM 1 – FOUR
Bickford Company plans to sell 135,000 units in
November and 180,000 units in December. Bickford's
policy is that 10 percent of the following month's sales
must be in ending inventory. On November 1, there
were 14,000 units in inventory.
167.600
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PROBLEM 2 – FOUR
Abrams Bottling Company sells fruit-flavored colas. Estimated
sales in cartons for May, June, and July are 1,000, 3,000 and
5,000 respectively. The price is forecast at $5 per carton.
Abrams requires that finished goods ending inventory be 20
percent of the next month's sales. Inventory was 500 units on
May 1. Each carton requires 12 oz of fruit syrup and 130 oz of
carbonated water. Materials ending inventory is 10 percent of
the next month's production needs. May 1 inventory met that
requirement. How many ounces of syrup and carbonated
water should be purchased on MAY?