Budgeted Sales in Bustillo Inc. Assignment

A: Bustillo Inc. is working on its cash budget for March. The budgeted beginning cash balance is $52,000. Budgeted cash receipts total $136,000 and budgeted cash disbursements total $131,000. The desired ending cash balance is $74,000. To attain its desired ending cash balance for March, the company needs to borrow: $17,000 / $0 / $131,000 / $74,000

B: Seventy percent of Bustillo company's sales are collected in the month of sale, 20% in the month following sale, and 10% in the second month following sale. The following are budgeted sales data for the company:

January February March April
Budgeted sales $200,000 $300,000 $350,000 $250,000

Total budgeted cash collections in April would be? $175,000 / $275,000 / $70,000 / $30,000

C: Budgeted sales in Bustillo Inc. over the next four months are given below:

September October November December
Budgeted sales $120,000 $140,000 $180,000 $160,000

Thirty percent of the company’s sales are for cash and 70% are on account. Collections for sales on account follow a stable pattern as follows: 50% of a month’s credit sales are collected in the month of sale, 30% are collected in the month following sale, and 20% are collected in the second month following sale. Given these data, cash collections for December should be? $141,800 / $100,500 / $118,700 / $161,400

D: Bustillo Corporation produces and sells Product CharlieD. To guard against stockouts, the company requires that 25% of the next month's sales be on hand at the end of each month. Budgeted sales of Product CharlieD over the next four months are:

June July August September
Budgeted sales in units 40,000 60,000 50,000 80,000

Budgeted production for August would be? 57,500 units / 107,000 units / 77,000 units / 80,000 units

E: The Bustillo Corporation is preparing its Manufacturing Overhead budget for the fourth quarter of the year. The budgeted variable manufacturing overhead is $4 per direct labor-hour; the budgeted fixed manufacturing overhead is $84,000 per month, of which $15,900 is factory depreciation. If the budgeted direct labor time for November is 7,900 hours, then the total budgeted manufacturing overhead for November is? $115,600 / $99,700 / $131,500 / $84,000

F: Bustillo Inc. cost formula for its vehicle operating cost is $2,920 per month plus $322 per snow-day. For the month of December, the company planned for activity of 16 snow-days, but the actual level of activity was 14 snow-days. The actual vehicle operating cost for the month was $8,350. The spending variance for vehicle operating cost in December would be closest to? $278 U / $278 F / $922 U / $922 F

G: Bustillo Inc. uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is $56,760 per month plus $2,626 per flight plus $9 per passenger. The company expected its activity in February to be 63 flights and 262 passengers, but the actual activity was 62 flights and 263 passengers. The actual cost for plane operating costs in February was $220,700. The plane operating costs in the planning budget for February would be closest to? $224,556 / $223,326 / $221,939 / $220,700

H: A total of 6,850 kilograms of a raw material was purchased at a total cost of $21,920. The materials price variance was $1,370 favorable. The standard price per kilogram for the raw material must be? $0.20 / $3.00 / $3.20 / $3.40

I: Bustillo Corporation makes a product with the following standard costs:

Standard Quantity or Hours Standard Price or
Direct materials 4.5 pounds $ 4.00 per pound
Direct labor 0.8 hours $ 21.00 per hour
Variable overhead 0.8 hours $ 9.50 per hour

In January the company produced 3,320 units using 13,280 pounds of the direct material and 2,776 direct labor-hours. During the month, the company purchased 16,900 pounds of the direct material at a cost of $14,040. The actual direct labor cost was $57,895 and the actual variable overhead cost was $25,260. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The labor rate variance for January is? $401 F / $401 U / $2,119 U / $2,119 F

J: Last year, Bustillo's division had total sales of $13,420,000, net operating income of $1,261,480, and average operating assets of $2,684,000. The company's minimum required rate of return is 15%. The division's margin is closest to? 9.4% / 47.0% / 62.7% / 20.0% .

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