Petrini Corporation Makes One Product and It Provided the Following

question 123

Multiple Choice

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 unit product cost is closest to:

• A) $20.80
• B) $87.80
• C) $79.80
• D) $100.60

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Definitions:

Federal Reserve System

The central banking system of the United States, responsible for monetary policy, regulating banks, maintaining financial stability, and providing financial services.

FDIC

The Federal Deposit Insurance Corporation, an independent agency of the United States government that insures deposits at banks and thrift institutions.

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A guarantee provided by government or private entities that deposits in banks are protected up to a certain limit in the event of a bank failure.

Commercial Banks

Commercial Banks are financial institutions that accept deposits, offer various banking services like loans and mortgages, and play a significant role in the financial system.