Fuson Corporation Makes One Product and Has Provided the Following

question 250

Multiple Choice

Fuson Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Credit sales are collected:30% in the month of the sale70% in the following monthRaw materials purchases are paid:30% in the month of purchase70% in the following monthThe ending finished goods inventory should equal 10% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs.The estimated finished goods inventory balance at the end of November is closest to:

• A) $44,388
• B) $117,957
• C) $101,517
• D) $145,905

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Definitions:

Fixed Costs

Expenses that do not vary with the level of output, such as rent, salaries, and loan payments.

Monopolistically Competitive

A market structure characterized by many firms offering products that are similar but not identical, leading to differentiated competition.

Total Revenue

The entirety of income a company secures from its sales or service activities over a certain period.

Total Cost

The sum of all costs incurred by a firm in producing a certain level of output.