Asked by
Hayley Callaway
on Dec 17, 2024Verified
Sill Corporation makes one product. Budgeted unit sales for January, February, March, and April are 9,900, 11,400, 11,900, and 13,400 units, respectively. The ending finished goods inventory equals 20% of the following month's sales. The ending raw materials inventory equals 40% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. If 61,000 pounds of raw materials are required for production in March, then the budgeted raw material purchases for February is closest to:
A) 58,900 pounds
B) 104,900 pounds
C) 57,500 pounds
D) 81,900 pounds
Finished Goods Inventory
Finished goods awaiting sale that have not been sold yet.
Raw Materials Inventory
The total value of all the materials that have not yet been used in the production process.
Raw Materials Production
The initial stage in the manufacturing process, involving the extraction or creation of raw materials to be used in production.
- Build an understanding of the systematic construction and defining features of different budget types, including sales, manufacturing overhead, cash, direct materials, and production budgets.
- Evaluate direct labor charges and raw material purchases as elements of the budget formulation process.
Verified Answer
SS
Learning Objectives
- Build an understanding of the systematic construction and defining features of different budget types, including sales, manufacturing overhead, cash, direct materials, and production budgets.
- Evaluate direct labor charges and raw material purchases as elements of the budget formulation process.
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