Harris Inc

question 15

Multiple Choice

Harris Inc., has budgeted sales in units for the next five months as follows: Past experience has shown that the ending inventory for each month should be equal to 20% of the next month's sales in units. The inventory on May 31 contained 1,880 units. The company needs to prepare a production budget for the next five months. The total number of units produced in July should be:

• A)9,260 units
• B)7,700 units
• C)7,800 units
• D)7,900 units

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Definitions:

Interest Expense

The price paid by an entity for the privilege of using borrowed funds over a designated period.

Operating Income

Earnings generated from a company's core business operations, excluding deductions of interest and taxes.

Credit Sales

Transactions where goods are sold and payment is received at a later date, extending credit to the buyer.

Gain from Sale

The profit realized from the sale of assets or investments when the selling price exceeds the original purchase price.