Fuson Corporation Makes One Product and Has Provided the Following

question 177

Multiple Choice

Fuson 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:
30% in the month of the sale
70% in the following month
Raw materials purchases are paid:
30% in the month of purchase
70% in the following month
The ending finished goods inventory should equal 10% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs.
If 40,380 pounds of raw materials are required for production in December, then the budgeted raw material purchases for November is closest to:

• A) 32,280 pounds
• B) 38,556 pounds
• C) 31,380 pounds
• D) 35,418 pounds

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Definitions:

Securities Act

Refers to the U.S. Securities Act of 1933, a federal piece of legislation enacted to regulate the securities industry and protect investors.

Effective Registration Date

The date on which a company's registration statement is declared effective by the Securities and Exchange Commission, allowing it to legally sell securities.

Prospectus

An investment document that provides details about a company or financial product, aimed at potential investors.

Registration Statement

A document submitted to securities regulators containing financial and other significant information about a company before it issues stock.