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1. KZ Trading Co. budgeted merchandise purchases of 40,000 units next month. The expected beginning inventory is 12,000 units and the desired inventory at the end of next month is 15,000 units. Budgeted sales in units for the next month is *

43,000 units

55,000 units

52,000 units

37,000 units

2. Edil Producers, Inc. will start its commercial operations in January 1, 2019. The sales forecast per the sales manager's estimates for its first year of operations is 50,000 units. However, the production manager estimated that only 80% of the sales forecast can be produced with the available workforce and equipment. The product will be sold for P20 per unit. The budgeted peso sales for Edil Producers Inc.'s initial year of operations is *

P800,000

P1,000,000

P50,000

P40,000

3. Bickford Company plans to sell 135,000 units in November and 180,000 units in December. Bickford's policy is that 10% of the following month's sales must be in ending inventory. On November 1, there were 14,000 units in inventory. It takes 30 minutes of direct labor time to make one unit. Direct labor wages average P17 per hour. Variable overhead is applied at the rate of P5 per direct labor hour. Fixed overhead is budgeted at P56,500 per month. What is the direct labor cost budgeted for November? *

P2,152,000

P707,600

P1,181,500

P950,600

4. Connor Company produces speaker systems for cars. Estimated sales (in units) in January are 40,000; in February 37,000; and in March 34,000. Each unit is priced at P60. Connor wants to have 35% of the following month's sales in ending inventory. That requirement was met on January 1. Each speaker system requires 3 boxes and 15 yards of wire. Boxes cost P4 each and wire is P0.60 per yard. Connor wants to have 20% of the following month's production needs in ending raw materials inventory. On January 1, Connor had 24,000 boxes and 100,000 yards of wire in inventory. How many boxes does Connor expect to purchase in January? *

114,420

159,650

148,500

214,550

5. Jumpdisk Co. writes checks averaging P15,000 a day, and it takes five days for these checks to clear. The firm also receives checks in the amount of P17,000 per day, but the firm loses three days while its receipts are being deposited and cleared. The firm's net float is? *

2 points

P32,000

P75,000

P126,000

P16,000

P24,000

6. MTR bank has agreed to provide a lockbox system to Sexy Inc. for a fixed fee of P50, 000 per year and a rate of P.50 for each payment processed by the bank. On average, Sexy Inc. receives 50 payments per day, each averaging P20,000. With the lockbox system, the company's collection float will decrease by two days. The annual interest rate on money market securities is 6%. If Sexy Inc. makes use of the lockbox system, what would be the net benefit to the company? Use 365 days in a year. *

2 points

P59,125

P120,000

P50,000

P60,875

7. AXE Co. expects to have sales of P30,000 in January, P33,000 in February, and P38,000 in March. If 20 % of sales are for cash, 40 % are credit sales paid in the month following the sale, and 40 % are credit sales paid 2 months following the sale, what are the cash receipts from sales in March? *

P30,000

P38,000

P47,400

P55,000

P32,800

8. Makmak Corporation uses the Baumol Cash Management Model to determine its optimal cash balance. For the coming year, the expected cash disbursement total P432,000. The interest rate on marketable securities is P8 per transaction. What is the optimal Cash Balance of the company? *

P142,000

P11,757.55

P5,878.78

P1,175.76

9. If Hot Tubs Inc. had annual credit sales of P2,027,773 and its days sales outstanding was equal to 35 days, what was its average A/R outstanding? (Use a 365-day year.) *

P 97,222

P 5,556

P194,444

P 57,143

10. The ordering costs related to a product are P12.50 per order. The cost of carrying one item of inventory for one year is P16. The business sells 40,000 units of the product evenly throughout the year. At EOQ, total ordering costs per year and total carrying costs per year, respectively, must be *

P1,562.50 ; P1,562.50

P1,562.50 ; P2,560.00

P2,000 ; P2,000

P4,000 ; P4,000

11. Data for Magaling Co.'s material X are as follows; annual usage : 12,600 units; Working days per year : 360 days normal lead time 20 days. The units of Material X are required evenly throughout the year. What is the reorder point? *

35 units

630 units

20th day

700 units

12. BMC Co. has an average A/R balance of P1,250,000, average inventory balance of P1,750,000, and average accounts payable balance of P800,000. Its annual sales are P12,000,000 and its cost of goods sold represents 80% of annual sales. Assume there are 365 days in a year. What is BMC Co.'s cash conversion cycle? *

84.15 days

53.23 days

60.83 days

72.28 days

100.55 days

13. A firm is offered trade credit terms of 3/15, net 45 days. The firm does not take the discount, and it pays after 67 days. What is the nominal annual cost of not taking the discount? *

21.71%

22.07%

24.52%

22.95%

14.A firm is offered trade credit terms of 3/15, net 30 days. The firm does not take the discount, and it pays after 50 days. What is the effective annual cost of not taking this discount? (Assume a 365-day year.) *

37.39%

44.30%

32.25%

30.00%

45.50%

15. GFB Co. buys on terms of 2/15, net 30 days. It does not take discounts, and it typically pays 30 days after the invoice date. Net purchases amount to P730,000 per year. On average, how much "free" trade credit does GFB Co. receive during the year? (Assume a 365-day year.) *