Answer the Following Questions Using the Information Below:
Furniture, Inc

question 147

Multiple Choice

Answer the following questions using the information below:
Furniture, Inc., estimates the following number of mattress sales for the first four months of 2016:
$$\begin{array} { l l } \text { Month } & \text { Sales } \\\text { January } & 22,000 \\\text { February } & 30,800 \\\text { March } & 28,600 \\\text { April } & 35,200\end{array}$$ Finished goods inventory at the end of December is 6,600 units. Target ending finished goods inventory is 20% of the next month's sales.
-How many mattresses need to be produced in January 2016?

• A) 15,400 mattresses
• B) 21,560 mattresses
• C) 28,460 mattresses
• D) 34,160 mattresses

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Definitions:

Net Income

The total revenue minus total expenses, representing the company's profit.

Operating Activities

These are the primary day-to-day activities of a business that relate to its production, sales, and deliveries of its products and services.

Prepaid Insurance

An asset account that represents the amount paid for insurance coverage in advance of the service period.

Depreciation Expense

Depreciation expense is the allocated reduction of the cost of a tangible fixed asset over its useful life, reflecting its wear and tear, or obsolescence.