The Following Budgeted Information Is Provided One Pound of Material Is Required for Each Finished Unit

question 26

Multiple Choice

The following budgeted information is provided:
$$\begin{array} { | l | c | c | c | } \hline \text { Month } & \mathbf { 1 } & \mathbf { 2 } & \mathbf { 3 } \\\hline \text { Sales in units } & 15,000 & 20,000 & 18,000 \\\hline \text { Production in units } & 16,000 & 22,000 & 15,000 \\\hline\end{array}$$ One pound of material is required for each finished unit.The inventory of materials at the end of each month should equal 20% of the following month's production needs.At the beginning of Month 1,there was 3,200 lbs.of materials on hand.Purchases of raw materials for Month 1 would be (in pounds) :

• A) 25,000.
• B) 23,400.
• C) 17,200.
• D) 22,000.

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Definitions:

Facility Closure

The process of permanently shutting down operations at a business location, often involving asset disposal and employee layoffs.

Proprietary Funds

Funds typically used in governmental accounting to account for business-like activities, where the government intends to recover costs through user charges.

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity.