Petrini Corporation Makes One Product and It Provided the Following

question 162

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 net operating income (loss) for February is closest to:

• A) $11,620
• B) $81,620
• C) $41,000
• D) $29,640

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Definitions:

Electronic Media

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TV Viewing

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An early social networking website that allows users to create personal profiles, share music, photos, and connect with friends, which was particularly popular in the early 2000s.

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Facilities that provide care and educational activities for children outside of their home, typically while parents or guardians are at work.