Rokosz Corporation Makes One Product and It Provided the Following

question 183

Multiple Choice

Rokosz 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 $104. Budgeted unit sales for October, November, December, and January are 6,900, 7,100, 11,300, and 15,300 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 20% of the following month's sales.
D.The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.00 per pound.
E. The direct labor wage rate is $23.00 per hour. Each unit of finished goods requires 2.5 direct labor-hours.
The budgeted required production for November is closest to:

• A) 7,940 units
• B) 10,780 units
• C) 9,360 units
• D) 7,100 units

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Definitions:

Income Taxes

Taxes levied by governments on individuals or corporations' income or profits.

Capital Budgeting

The process that a business undertakes to evaluate potential major projects or investments, involving the calculation of future cash flows and the application of discounting techniques.

Accumulated Depreciation

Accumulated depreciation represents the total amount of depreciation expense that has been recorded for an asset since it was acquired, reflecting its decrease in value over time.

Book Value

The net value of a company's assets minus its liabilities, as recorded on the balance sheet, often used to assess a company's worth.