Planning Systems, Inc A Finished Unit Requires One Unit of Material a and Production

question 15

Multiple Choice

Planning Systems, Inc. has forecast the following unit sales and production for the next year, by quarter: $$\begin{array}{l}\begin{array} { l l l l l } & 1 ^ { \text {st } } & 2 ^ { \text {nd } } & 3 ^ { \text {rd } } & 4 ^ { \text {th } } \\\text { Production } & 150 & 160 & 140 & 100 \\\text { Sales } & 120 & 140 & 150 & 120\end{array}\\\text { The firm has beginning inventories as follows: }\\\begin{array} { l l } \text { Finished goods } & 50 \text { units } \\\text { Direct material A } & 100 \\\text { Direct material B } & 100\end{array}\end{array}$$ 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.
What is the ending inventory for material A for quarter 2?

• A) 24
• B) 28
• C) 30
• D) 100

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Definitions:

Human Development Index

An index measuring three basic dimensions of human development: life expectancy, education, and per capita income indicators, used to rank countries into tiers of human development.

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An economic theory that compares different countries' currencies through a "basket of goods" approach, to assess the relative value of the currencies and the cost of living.

Consumer Price Index

An index measuring the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Reserve Requirement

The minimum amount of funds that a bank must hold in reserve against deposits, as mandated by central banking authorities.