Use the Information Below to Answer the Following Question(s)

question 81

Multiple Choice

Use the information below to answer the following question(s) .Country Heather manufactures flowerpots.It expects to sell 40,000 flowerpots in 2019.The company had enough beginning inventory of direct materials to produce 48,000 units.Beginning inventory of finished units totalled 4,000 with a target ending inventory of 5,000 units.The flowerpots sell for $6.00 and the company keeps no work-in-process inventory.Direct materials costs for each flowerpot total $2.00 while direct labour is $1.00.Factory overhead is $0.40 per flowerpot.
-How many flowerpots should Country Heather produce in 2019?

• A)48,000 flowerpots
• B)44,000 flowerpots
• C)41,000 flowerpots
• D)39,000 flowerpots
• E)18,000 flowerpots

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Definitions:

Wasting Assets

Resources that decrease in value over time due to physical deterioration or depletion, such as minerals, oil reserves, or patents.

Units-of-production Method

A depreciation method that allocates an asset's cost based on its use or output during the period, considering the number of units produced.