Sleeter Corporation Makes One Product and It Provided the Following

question 223

Multiple Choice

Sleeter Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations:Budgeted unit sales for April, May, June, and July are 7,500, 11,900, 10,800, and 14,800 units, respectively. All sales are on credit.The ending finished goods inventory equals 30% of the following month's sales.The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 6 pounds of raw materials. The raw materials cost $5.00 per pound.If 72,000 pounds of raw materials are required for production in June, then the budgeted cost of raw material purchases for May is closest to:

• A) $559,230
• B) $455,100
• C) $350,970
• D) $347,100

Recognize the effects of transactions on the accounting equation.

Understand the concepts of debits and credits and their application in accounting transactions.

Record and interpret transactions involving different types of accounts (e.g., assets, liabilities, equity, expenses, revenues).

Perform a horizontal analysis of income statements to identify trends.

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Definitions:

Net Operating Income

A gauge of a corporation's earnings from its main operating activities, not including the effects of interest and taxes.

Sales Increase

An upward trend in the volume or value of sales transactions over a particular period, indicating growth in business activity.

Margin of Safety

The difference between actual or projected sales and the break-even sales, indicating the amount by which sales can decline before a business incurs losses.

Percentage of Sales

A financial ratio that expresses certain financial metrics, such as expenses or profits, as a percentage of total sales, providing insight into efficiency or profitability.