Payne Company Provided the Following Information Relevant to Its Inventory

question 140

Multiple Choice

Payne Company provided the following information relevant to its inventory sales and purchases for December Year 1 and the first quarter of Year 2: $\begin{array}{|l|l|r|r|r|}\hline& \text { Dec. Year } 1 &\text { Jan. Year } 2 &\text { Feb. Year } 2 & \text { Mar. Year } 2 \\\hline & \text { (Actual) } & \text { (Budgeted) }& \text { (Budgeted) }& \text { (Budgeted) } \\\hline \text {Cost of goods sold } &\$ 80,000 & \$ 140,000 & \$ 180,000 & \$ 120,000 \\\hline\end{array}$ Desired ending inventory levels are 25% of the following month's projected cost of goods sold.The company purchases all inventory on account.January Year 2 budgeted purchases are $150,000.The normal schedule for inventory payments is 60% payment in month of purchase and 40% payment in month following purchase. Budgeted cash payments for inventory in February Year 2 would be:

• A) $132,600.
• B) $152,600.
• C) $99,000.
• D) $159,000.

Explain the free-rider problem and how it influences the provision of public goods.

Recognize the inefficiencies in resource allocation associated with common resources and public goods.

Understand how the private market's response to nonexcludable and nonrival goods leads to market failure.

Analyze the role of government intervention in correcting market failures related to public goods and common resources.

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Definitions:

Hispanics

A term referring to people from, or descendants of people from, Spanish-speaking countries, particularly in the context of the United States.

Below the Poverty Line

Refers to individuals or families whose income falls below the official threshold defined by the government, indicating a lack of sufficient income to meet basic needs.

White Trash

A derogatory term directed at white people, especially the poor working class, implying low social status.

Impoverished Whites

Refers to white individuals or communities living in conditions of poverty, highlighting that economic hardship can affect people across different races.