Vaviano Ltd Expects to Sell 34,000 Units of Finished Goods

question 89

Multiple Choice

Vaviano Ltd expects to sell 34,000 units of finished goods over the next 6-month period. The company has 10,000 units on hand and its managers want to have 14,000 units on hand at the end of the period. To produce one unit of finished product, two units of direct materials are needed. Vaviano has 100,000 units of direct material on hand and has budgeted for an ending inventory of 110,000 units. What is the amount of direct material to be purchased (in units) ?

• A) 38,000
• B) 66,000
• C) 86,000
• D) 76,000

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Definitions:

Financial Stability

The condition when an organization or individual has a strong and sustainable financial position, capable of withstanding economic fluctuations.

Maturity Stage

The phase in a product's life cycle characterized by slowed growth, market saturation, and stabilization of customer demand, requiring strategies for extension or adaptation.

Business Model

A strategic plan outlining how a company creates, delivers, and captures value in economic, social, cultural, or other contexts.

Market Success

The achievement of desired sales, profit margins, and market share goals within a targeted market or industry.