QUESTION 11 Sartain Corporation is in the process of preparing its annual budget

Question

QUESTION 11

Sartain Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.

  

Beginning Inventory

Ending Inventory

  Finished goods (units)

24,000            

74,000       

  Raw material (grams)

54,000            

44,000       

  

Each unit of finished goods requires 2 grams of raw material.

  

If the company plans to sell 590,000 units during the year, how much of the raw material should the company purchase during the year?

1,324,000 grams

1,270,000 grams

1,280,000 grams

1,294,000 grams

7 points   

QUESTION 12

LHU Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.3 hours of direct labor at the rate of $19.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June.

  
The budgeted direct labor cost per unit of Product WZ would be:

$20.10

$19.00

$43.70

$5.60

Sartain Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.

Explanation / Answer

Part 2

Production Schedule ADD No of Units Sold 590000 ADD Closing Finished goods 74000 LESS Opening Finished goods 24000 No of Unit Produced 640000 Purchase Schedule ADD No units Issued to Production 640000*2 1280000 ADD Closing Inventory 44000 LESS Opening Inventory 54000 No of Unit to be Purchased 1270000

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