The TS Corporation Has Budgeted Sales for the Year as Follows

question 119

Multiple Choice

The TS Corporation has budgeted sales for the year as follows: The ending inventory of finished goods for each quarter should equal 25% of the next quarter's budgeted sales in units. The finished goods inventory at the start of the year is 2,500 units. Four pounds of raw materials are required for each unit produced. Raw materials on hand at the start of the year total 4,200 pounds. The raw materials inventory at the end of each quarter should equal 10% of the next quarter's production needs in material. Scheduled production for the third quarter should be:

• A)14,500 units
• B)18,500 units
• C)15,500 units
• D)13,500 units

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Definitions:

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of the business, whichever is longer.

Debt-Equity Ratio

This ratio, a test of financial leverage, divides a company's liabilities by its stockholders' equity.

Total Debt

The sum of all short-term and long-term liabilities held by an entity.

Total Assets

Total assets are the sum of all current and non-current assets owned by a company, reflecting its overall resources available for use in operations or for sale.