Figure 15-3
Projected Sales for Sommers, Inc The Selling Price Is £40 Per Unit

question 70

Multiple Choice

Figure 15-3
Projected sales for Sommers, Inc., for next year and beginning and ending inventory data are as follows: $\begin{array}{lr}\text { Sales } & 50,000 \text { units } \\\text { Beginning inventory } & 4,000 \text { units } \\\text { Desired ending inventory } & 8,000 \text { units }\end{array}$ The selling price is £40 per unit. Each unit requires four pounds of material which costs £6 per pound. The beginning inventory of raw materials is 12,000 pounds. The company wants to have 3,000 pounds of material in inventory at the end of the year.
-Refer to Figure 15-3. Sommers' budgeted total purchase cost of direct materials would be

• A)£1,350,000.
• B)£1,242,000.
• C)£1,206,000.
• D)£1,296,000.

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Definitions:

Personal Computers

Electronic devices designed for individual use, capable of executing a set of commands to perform various tasks.

Financial Planning

The process of determining short and long-term financial goals and creating strategies to meet those goals.

ACP

In financial contexts, ACP often stands for "Average Collection Period," representing the average number of days it takes for a company to receive payments from its customers.

Receivables Balance

The cumulative sum of money that customers owe to a business for products supplied or services rendered but not yet compensated for.