XYZ Co. has forecasted June sales of 500 units and July sales of 1,800 units. Th
ID: 2715939 • Letter: X
Question
XYZ Co. has forecasted June sales of 500 units and July sales of 1,800 units. The company maintains ending inventory equal to 125% of next month's sales. June beginning inventory reflects this policy. What is June's required production?
2,275 units
2,125 units
2,075 units
2,025 units
$9,400
$9,300
$8,900
$9,100
In general, the smaller the portion of a firm's sales that are on credit, the
more the firm can buy raw materials on credit.
more rapidly credit sales will be paid off.
higher will be the firm's need to borrow.
lower will be the firm's need to borrow.
The difference between total receipts and total payments is referred to as
cumulative cash flow
cash balance.
beginning cash flow.
net cash flow.
A firm has beginning inventory of 390 units at a cost of $10 each. Production during the period was 700 units at $13 each. If sales were 790 units, what is the cost of goods sold (assume FIFO)?Explanation / Answer
1)production units = June sales +ending inventory -beginning inventory
= 500 + (1800*125%) - (500*125%)
= 500 + 2250 - 625
= 2125 units
correct option is "B"
2)correct option is "D" -9100
[COGS = (390*10) + [(790-390) = 400 *13]
= 3900 + 5200 = 9100
3)Correct option is "D" -lower will be the firm needs to borrow
As due to lower credit sales,firm will have higher liquidity (availability of cash) which will reduce firm needs to borrow]
4)net cash flow.
Net cahs flow - Total receipts -toal payments
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