Homer Company Has a Production Schedule of 11,000 Units and a Budgeted

question 125

Multiple Choice

Homer Company has a production schedule of 11,000 units and a budgeted sales volume of 10,000 units for the current year.In addition, 2,000 units are in beginning finished goods inventory._____ units are expected to be in ending finished goods inventory.

• A)13,000
• B)9,000
• C)5,000
• D)3,000

---

Definitions:

First-In, First-Out Method

An inventory valuation method where the first items produced or acquired are the first ones sold or used, affecting cost of goods sold and inventory valuation.

Material Costs

The total cost of materials used in the production of goods, including both direct raw materials and indirect materials.

Equivalent Units

A concept used in cost accounting to denote the amount of finished goods units that could have been produced given the total amount of direct materials, direct labor, and manufacturing overhead costs incurred.

Weighted-Average Method

An inventory costing method where costs of goods are calculated based on the weighted average of the costs of similar items.