DeVito Exports, Inc

question 61

Multiple Choice

DeVito Exports, Inc. budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels are planned for the fiscal year of July 1, 2010 to June 30, 2011: Three kilos of raw materials are needed to produce each unit of finished product. If DeVito Exports plans to produce 280,000 units during the 2010-2011 fiscal year, how many kilos of materials will the company need to purchase for its production during the year?

• A) 841,000
• B) 843,000
• C) 840,000
• D) 839,000

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Definitions:

Capacity Shortage

A situation where the demand for a company's output exceeds its production capacity.

Margin Reduction

The decrease in the difference between the selling price of a product and its cost, often due to increased costs or reduced selling prices.

Backup Source

An alternative or supplementary source, often used for data, power, or supply chain redundancy, to ensure continuity in the event of primary source failure.

Production Capacity

The maximum amount of goods or services that can be produced by a facility within a specific time frame under normal working conditions.