Noel Enterprises Has Budgeted Sales in Units for the Next

question 56

Multiple Choice

Noel Enterprises has budgeted sales in units for the next five months as follows: Past experience has shown that the ending inventory for each month must be equal to 10% of the next month's sales in units. The inventory on May 31 contained 400 units. The company needs to prepare a production budget for the second quarter of the year. The beginning inventory in units for September is:

• A)380 units
• B)460 units
• C)4,600 units
• D)720 units

---

Definitions:

Revenues

The cumulative revenue derived from selling goods or offering services that are central to the business's main activities.

Net Income

The profit a company holds onto after removing expenses and taxes from its earned revenue.

Operating Revenues

Income earned from a company's main business activities or operations, excluding non-operating revenue like interest or sale of assets.

Operating Expenses

Regular costs incurred in the process of running a business, such as rent, utilities, and payroll, that do not include the cost of goods sold.