Hesterman Corporation Makes One Product and Has Provided the Following

question 6

Multiple Choice

Hesterman 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:
40% in the month of the sale
60% in the following month
The ending finished goods inventory should equal 40% of the following month's sales. The ending raw materials inventory should equal 20% of the following month's raw materials production needs.
-If 39,720 pounds of raw materials are required for production in June,then the budgeted cost of raw material purchases for May is closest to:

• A) $145,224
• B) $124,992
• C) $101,160
• D) $104,760

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Definitions:

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