9. (TCO 2) Hester Company budgets on an annual basis for its fiscal year. The fo

Question

9. (TCO 2) Hester Company budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for the fiscal year of July 1, 20x2, through June 30, 20x3.
July 1, 20x2 June 30, 20x3
Raw material (note) 40,000 10,000
Work in process 8,000 8,000
Finished goods 30,000 5,000
(note) Three units of raw material are needed to produce each unit of finished product.

If Hester Company plans to sell 500,000 units during the 20x2-20x3 fiscal year, the number of units it would have to manufacture during the year would be

(Points : 3)


505,000.
500,000.
480,000.
475,000.

Explanation / Answer

500,000 – 30,000 + 5,000 = 475,000 Answer: 475,000

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