Litzinger Corporation Makes One Product

question 171

Multiple Choice

Litzinger Corporation makes one product. The ending raw materials inventory should equal 20% of the following month's raw materials production needs. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $1.00 per pound. The company estimates that it will need 53,720 pounds of raw material to satisfy production needs in June. The raw materials inventory balance at the end of May should be closest to:

• A) $10,744
• B) $7,984
• C) $50,664
• D) $42,680

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Definitions:

Productive Workers

Employees who contribute significantly to the output of goods or services within an organization or economy.

Supply of Capital

Supply of Capital refers to the total amount of capital—whether in the form of cash, assets, or investments—available in the market for investment purposes.

Rental Price

The cost associated with renting a property, such as an apartment, house, or piece of equipment.

Concrete Workers

Individuals specialized in working with concrete, mixing, forming, and finishing surfaces and structures.