Use the following information for questions 13 through 15. Projected sales for M

Question

Use the following information for questions 13 through 15.

Projected sales for Module Company for the next month and beginning and ending inventory data are as follows: Sales 80,000 units Beginning inventory 6,000 units Targeted ending inventory 14,000 units The selling price is $40 per unit. Each unit requires 8 pounds of material, which costs $2 per pound. The beginning inventory of raw material is 30,000 pounds. The company wants to have 40,000 pounds of material in inventory at the end of the month.

13. Budgeted sales would be _____. a. $ 2,880,000 b. $ 3,520,000 c. $ 1,600,000 d. $ 1,920,000

14. According to the production budget, how many units should be produced? a. 90,000 units b. 70,000 units c. 88,000 units d. 80,000 units

15. Pounds of material to be purchased would be _____. a. 352,000 lbs. b. 362,000 lbs. c. 392,000 lbs. d. 342,000 lbs.

Explanation / Answer

Budgeted sales Units should be produced *$40 $3520000 B 88000*40 Production Budget 88000 C Budgeted(Ending Inventory+Sales-Beginning Inventory) 14000+80000-6000 Pounds of material Purchased=Units to be produced*8* (88000*8) 704000 pounds Converted into lbs *.5 352000 A

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