Petrini Corporation Makes One Product and It Provided the Following

question 276

Multiple Choice

Petrini Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations:The budgeted selling price per unit is $110. Budgeted unit sales for January, February, March, and April are 7,500, 10,600, 12,000, and 11,700 units, respectively. All sales are on credit.Regarding credit sales, 30% are collected in the month of the sale and 70% in the following month.The ending finished goods inventory equals 30% of the following month's sales.The ending raw materials inventory equals 10% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $4.00 per pound.Regarding raw materials purchases, 40% are paid for in the month of purchase and 60% in the following month.The direct labor wage rate is $23.00 per hour. Each unit of finished goods requires 2.6 direct labor-hours.Manufacturing overhead is entirely variable and is $8.00 per direct labor-hour.The variable selling and administrative expense per unit sold is $1.70. The fixed selling and administrative expense per month is $70,000.The estimated finished goods inventory balance at the end of February is closest to:

• A) $74,880
• B) $362,160
• C) $316,080
• D) $287,280

Identify the differences between the direct and indirect methods of reporting cash flows from operating activities.

Recognize the components and classifications of cash flows within the statement (operating, investing, and financing activities).

Distinguish between cash flows from operating activities and other activities (investing and financing).

Identify examples of cash flows from investing and financing activities.

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Definitions:

Group Goals

Objectives or outcomes that a group collectively seeks to achieve or accomplish.

Groupthink

A psychological phenomenon that occurs within a group of people, where the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Social Pressure

The influence that is exerted by society or a social group on individuals to conform to expected norms and behaviors.

Problem-solving Process

A systematic sequence of actions aimed at finding a solution to a particular issue.