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1-Webster Corporation is preparing its cash budget for April. The March 31 cash balance is $38,400. Cash receipts are expected to be $651,000 and cash payments for purchases are expected to be $613,500. Other cash expenses expected are $28,000 selling and $34,500 general and administrative. The company desires a minimum cash balance at the end of each month of $40,000. If necessary, the company borrows enough cash to meet the minimum using a short-term note. The amount Webster must borrow during April is:

Multiple Choice

• $0.

• $26,600.

• $13,400.

• $115,900.

• $75,900.

2- Claremont Company sells refurbished copiers. During the month, the company sold 155 copiers for total sales of $387,500. The budget for the month was to sell 150 copiers at an average price of $2,700. The sales price variance for the month was:

Multiple Choice

• $17,500 unfavorable.

• $17,500 favorable.

• $31,000 unfavorable.

• $27,000 unfavorable.

• $31,000 favorable.

3-Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period:

Office Expenses	Total				Allocation Basis
Salaries	$	48,000			Number of employees
Depreciation		28,000			Cost of goods sold
Advertising		62,000			Net sales

Item	Drilling			Grinding			Total
Number of employees		1,600			2,400			4,000
Net sales	$	366,000		$	549,000		$	915,000
Cost of goods sold	$	117,800		$	192,200		$	310,000

The amount of depreciation that should be allocated to Drilling for the current period is:

Multiple Choice

• $28,000.

• $38,440.

• $10,640.

• $17,360.

• $62,000.

4- CakeCo, Inc. has three operating departments. Information about these departments is listed below. Maintenance is service department at CakeCo that incurred $11,700 of costs during the period. If allocated maintenance cost is based on floor space occupied by each of the operating departments, compute the amount of maintenance cost allocated to the Baking Department.

	Mixing				Baking				Packaging
Direct costs	$	24,000			$	18,000			$	12,000
Sq. ft. of space		1,300				1,950				650

Multiple Choice

• $300.

• $900.

• $5,200.

• $7,800.

• $5,850.

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