JJJohnson Has Decided to Supplement His Income by Selling Beehives

question 81

Multiple Choice

J.J.Johnson has decided to supplement his income by selling beehives.He expects to sell 25,000 hives in 2014.He ended 2013 with 2,500 completed hives in inventory and would like to complete operations in 2014 with at least 2,800 completed hives in inventory.There is no ending work in process inventory.One beehive holds about 250 bees.The bees are purchased for $4.00 per 1,000 bees.The hives sell for $15.00 each.
-What would be the yearly total on the direct materials purchases budget for bee purchases of Johnson? (Assume for this question that 40,000 beehives will be produced. )

• A)$44,000
• B)$16,000
• C)$64,000
• D)$40,000

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