5. Jacobsen, Inc. is planning to sell 200 buckets and produce 190 buckets during

Question

5. Jacobsen, Inc. is planning to sell 200 buckets and produce 190 buckets during March. Each bucket requires 500 grams of plastic and one-half hour of direct labor. Plastic costs $10 per 500 grams and employees of the company are paid $15.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Jacobsen has 300 kilos of plastic in beginning inventory and wants to have 200 kilos in ending inventory. How much is the total amount of budgeted direct labor for March?
A) $1,500
B) $3,000
C) $1,425
D) $2,850

6. A budget period should be
A) monthly.
B) for a year or more.
C) long-term.
D) long enough to provide an obtainable goal under normal business conditions.

7. For a merchandiser, the starting point in the development of the master budget is the
A) cash budget.
B) sales budget.
C) selling and administrative expenses budget.
D) budgeted income statement.

8. Owens Company's cash budget showed total available cash less cash disbursements. What does this amount equal?
A) Ending cash balance
B) Total cash receipts
C) The excess of available cash over cash disbursements
D) The amount of financing required

9. Which one of the following is not a benefit of budgeting?
A) It facilitates the coordination of activities.
B) It provides definite objectives for evaluating performance.
C) It provides assurance that the company will achieve its objectives.
D) It requires all levels of management to plan ahead on a recurring basis.

Explanation / Answer

5. C) $1,425
6. D) long enough to provide an obtainable goal under normal business conditions.
7. B) sales budget 8. C) The excess of available cash over cash disbursements
9. C) It provides assurance that the company will achieve its objectives Thank you....

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