Petrini Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations:a.The budgeted selling price per unit is $110. Budgeted unit sales for January, February, March, and April are 7,500, 10,600, 12,000, and 11,700 units, respectively. All sales are on credit. b.Regarding credit sales, 30% are collected in the month of the sale and 70% in the following month. c.The ending finished goods inventory equals 30% of the following month's sales. d.The ending raw materials inventory equals 10% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $4.00 per pound. e.Regarding raw materials purchases, 40% are paid for in
the month of purchase and 60% in the following month. f.The direct labor wage rate is $23.00 per hour. Each unit of finished goods requires 2.6 direct labor-hours. g.Manufacturing overhead is entirely variable and is $8.00 per direct labor-hour. h.The variable selling and administrative expense per unit sold is $1.70. The fixed selling and administrative expense per month is $70,000. The estimated finished goods inventory balance at the end of February is closest to: (Round your intermediate calculations to 2 decimal places.)
A. $362,160
B. $74,880
C. $287,280
D. $316,080
Answer: A
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a. cash account. b. retained earnings account. c. paid-in capital account. d. income summary account.
The term net worth is a more accurate term than owner's equity because assets are recorded at original cost rather than at current value
Indicate whether the statement is true or false
A plant produces 75 different electronic products. Each product requires an average of six components that are purchased externally. By redesigning the products, it is possible to produce the 75 products so that they all have three components in common. This will reduce the demand for purchasing, receiving, and paying bills. Estimated savings from the reduced demand are $1,200,000 per year Calculate the nonvalue-added cost of purchasing, receiving and paying bills.
A) $1,200,000 B) $1,000,000 C) $900,000 D) $600,000
Depreciation must be considered when evaluating the incremental operating cash flows associated with a capital budgeting project because:?
A. ?it represents a tax-deductible cash expense. B. ?the firm has a cash outflow equal to the depreciation expense each year. C. ?depreciation has an impact on the taxes paid by the firm, which is a cash flow. D. ?depreciation is a sunk cost. E. ?depreciation is a cash flow that doesn't change.