Planning Systems, Has Forecast the Following Unit Sales and Production

question 28

Multiple Choice

Planning Systems, has forecast the following unit sales and production for the next year, by quarter: A finished unit requires one unit of material A and two units of material B. There should be enough material on hand at the end of each quarter to meet 20% of the next quarter's production needs. There are no work-in-process inventories.
What is the ending inventory for material B in quarter 1?

• A) 28
• B) 32
• C) 56
• D) 64

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Definitions:

Wasted Time

Time that is not used effectively or productively.

Price Floor

A government-imposed minimum price for goods or services, aimed at preventing market prices from falling below a certain level to protect producers.

Market For Soda

The commercial space in which various types and brands of soda (sugary, carbonated beverages) are bought, sold, and competed over.

Surplus

The situation in which the quantity supplied of a product exceeds the quantity demanded at the existing price.