Super Solar Systems Has Forecast the Following Unit Sales and Production

question 34

Multiple Choice

Super Solar Systems has forecast the following unit sales and production for the next year, by quarter: $$\begin{array} { | l | l | l | l | l | } \hline & 1 ^ { \text {st } } & 2 ^ { \text {nd } } & 3 ^ { \text {rd } } & 4 ^ { \text {th } } \\\hline \text { Production } & 75 & 80 & 70 & 50 \\\hline \text { Sales } & 60 & 70 & 75 & 60 \\\hline\end{array}$$ Super Solar has the following beginning inventories:
$$\begin{array} { | l | l | } \hline \text { Firished Goods } & 50 \\\hline \text { Direct Material A } & 50 \\\hline \text { Direct Material B } & 50 \\\hline\end{array}$$ A finished unit requires one unit of material A and two units of material
B There should be enough material on hand at the end of each quarter to meet 20% of the next quarter's production needs. There are no work-in-process inventories. How much material A must be purchased in quarter 2?

• A) 78
• B) 80
• C) 156
• D) 16

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Definitions:

Par Value

The stated or principal value of a bond, stock share, or coupon as specified on its certificate or document.

Journal Entries

Journal entries are the record of financial transactions in the accounting books, detailing debts and credits for each account affected by the transaction.

Paid-In Capital

Funds raised by a company from equity, and not from ongoing operations, reflected on the balance sheet.

Treasury Stock

Shares that were once outstanding and have been bought back by the issuing company, reducing the amount of stock on the open market.