Roberts Enterprises Has Budgeted Sales in Units for the Next

question 93

Multiple Choice

Roberts Enterprises has budgeted sales in units for the next five months as follows: $\begin{array} {| l | r | } \hline \text { June } & 4,500 \text { units } \\\hline \text { July } & 7,100 \text { units } \\\hline \text { August } & 5,300 \text { units } \\\hline \text { September } & 6,700 \text { units } \\\hline \text { October } & 3,700 \text { units } \\\hline\end{array}$ Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on May 31 contained 410 units. The company needs to prepare a production budget for the second quarter of the year.




-What is the desired ending inventory for August?

• A) 370 units.
• B) 530 units.
• C) 670 units.
• D) 710 units.

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Definitions:

Materials Requisitions

A document or electronic form that authorizes the transfer of materials from storage to production, specifying types, quantities, and the purpose of the materials needed.

Controlling Account

A controlling account is a summary account in the general ledger that aggregates the total balances of all related subsidiary accounts. It is often used in relation to accounts receivable and payable.

General Ledger

A comprehensive accounting record of all transactions that have taken place over the life of an organization, serving as the primary data source for the financial statements.

Labor Costs

Expenses related to the compensation of employees, including wages, salaries, benefits, and taxes associated with labor.