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Petrini Corporation Makes One Product and It Provided the Following

question 195

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:
a. 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.
b. Regarding credit sales, 30% are collected in the month of the sale and 70% in the following month.
c. The ending finished goods inventory equals 30% of the following month's sales.
d. 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.
e. Regarding raw materials purchases, 40% are paid for in the month of purchase and 60% in the following month.
f. The direct labor wage rate is $23.00 per hour. Each unit of finished goods requires 2.6 direct labor-hours.
g. Manufacturing overhead is entirely variable and is $8.00 per direct labor-hour.
h. The variable selling and administrative expense per unit sold is $1.70. The fixed selling and administrative expense per month is $70,000.
-The budgeted required production for February is closest to:

Definitions:

Horizontal Merger

A merger between two companies operating in the same industry, often aiming to create synergies, expand market share, or reduce competition.

Product Extension Merger

A strategic action where companies merge to add new product lines or services, enhancing their market reach or diversity.

Conglomerate Merger

A conglomerate merger is the combination of two or more companies operating in entirely different industries into a single corporate structure.

Antitrust Laws

Legislation designed to promote fair competition for the benefit of consumers by regulating anti-competitive practices.