Barry CoManufactures Leather Briefcases and Carryalls

question 155

Multiple Choice

Barry Co.manufactures leather briefcases and carryalls.Barry's production manager has provided the following production budget.Each briefcase or carryall requires 1.2 yards of leather fabric and Barry maintains an ending inventory of leather fabric equal to 25% of the next month's production needs.
If each yard of leather fabric costs $6.40,how much should Barry budget for purchases of fabric in February?

• A) $468,480
• B) $372,480
• C) $310,400
• D) $384,000

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Definitions:

Accounts Receivable Period

measures the average number of days it takes a company to collect payment after a sale has been made, indicating the efficiency of its credit policies.

Cost of Goods Sold

Represents the total cost directly tied to the production or acquisition of the goods sold by a company during a specific period.

Sales

The activities involved in selling goods or services in return for money or other compensation, serving as a primary revenue source for businesses.