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

question 140

Multiple Choice

Use the information below to answer the following question(s) .Layne Cedar manufactures cedar chests.The estimated number of chests for the first three months of 2019 is as follows:
Finished goods inventory at the end of December is 3,000 units.Ending finished goods are equal to 30 percent of next month's sales.April 2019 sales are expected to total 16,000 units.
-What should be the budgeted number of chests produced in January 2019?

• A)8,800 chests
• B)11,200 chests
• C)13,000 chests
• D)14,200 chests
• E)14,700 chests

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Definitions:

Marginal Cost

The increase in cost that arises from an additional unit of production.

Average Variable Cost

The per unit cost of variable inputs (like labor and raw materials) that change with the level of output.

Marginal Cost

The additional cost incurred by producing one more unit of a product or service, which typically varies with the level of production.

Total Costs

The sum of fixed and variable costs incurred by a business in the production of a good or service.