Planning Systems, Inc

question 64

Multiple Choice

Planning Systems, Inc. has forecast the following unit sales and production for the next year, by quarter: 1^st 2^nd 3^rd 4^th
Production 150 160 140 100
Sales 120 140 150 120
The firm has beginning inventories as follows:
Finished goods 50 units
Direct material A 100
Direct material B 100
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 A for quarter 2?

• A)24
• B)28
• C)30
• D)100

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Definitions:

Stock Dividend

A distribution of extra shares instead of cash to shareholders, which raises the total share count they possess.

Net Income

The amount of money a business keeps as profit after all expenditures, taxes, and costs are deducted from its aggregate revenue.

Preferred Dividends

Dividends that are allocated and paid to preferred shareholders before any dividends can be issued to common shareholders.

Operating Expenses

Costs that a business incurs through its normal business operations, excluding cost of goods sold.