Rokosz Corporation Makes One Product and It Provided the Following

question 152

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.
If 60,500 pounds of raw materials are required for production in December, then the budgeted cost of raw material purchases for November is closest to:

• A) $91,880
• B) $139,520
• C) $79,400
• D) $115,700

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Definitions:

Indicator Variable

A variable used in statistics that takes the value 1 to indicate the presence of a certain condition and 0 to indicate its absence.

Nominal Variables

Categorical variables that have two or more categories without having a natural order or rank.

College Major

The specialized area of study or field chosen by a college or university student to focus their academic coursework and degrees.

Nominal

A level of measurement that categorizes data but does not rank them.