Hesterman Corporation Makes One Product and Has Provided the Following

question 194

Multiple Choice

Hesterman Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Credit sales are collected:
40% in the month of the sale
60% in the following month
The ending finished goods inventory should equal 40% of the following month's sales. The ending raw materials inventory should equal 20% of the following month's raw materials production needs.
The estimated direct labor cost for May is closest to:

• A) $786,800
• B) $31,472
• C) $534,000
• D) $281,000

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Definitions:

Accounting

The systematic process of recording, measuring, and communicating financial information about economic entities.

Recording

The act of documenting financial transactions in the books of accounts as part of the accounting process.

Transactions

Financial events that affect the assets, liabilities, or equity of a company, recorded in its accounting system.

Accounting

The systematic process of recording, measuring, and communicating information about financial transactions.