The Molson Company Had Budgeted Production for the Year as Follows

question 74

Multiple Choice

The Molson Company had budgeted production for the year as follows:
$\begin{array}{|l|c|c|c|c|}\hline \text { Quarter } & \mathbf{1} & \mathbf{2} & \mathbf{3} & \mathbf{4} \\\hline \text { Production in units } & 10,000 & 12,000 & 16,000 & 14,000 \\\hline\end{array}$ Four pounds of raw materials are required for each unit produced.Raw materials on hand at the start of the year total 4,000 lbs.The raw materials inventory at the end of each quarter should equal 10% of the next quarter's production needs in materials.Budgeted purchases of raw materials in the second quarter would be (in lbs. ) :

• A) 48,000 lbs.
• B) 46,400 lbs.
• C) 49,600 lbs.
• D) 54,400 lbs.

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Definitions:

Functional Currency

The chief monetary unit in the leading economic area where an organization conducts operations, utilized in its financial statements.

Financial Statements

Structured reports that detail the financial performance, position, and cash flows of a business.

Exchange Rates

The rate at which one currency can be exchanged for another currency, which can fluctuate based on market conditions.

Statement of Retained Earnings

A financial document outlining the changes in retained earnings over a specific period, including net income and dividends paid.