Young Enterprises Has Budgeted Sales in Units for the Next

question 52

Multiple Choice

Young Enterprises 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 10% of the next month's sales in units. The inventory on May 31 fell short of this goal since it contained only 400 units. The company needs to prepare a Production Budget for the next five months.
-The total number of units to be produced in July is:

• A)7,740 units
• B)7,200 units
• C)7,020 units
• D)7,280 units

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Definitions:

Breaking Even

The situation in which a firm is earning exactly a normal rate of return.

Economic Profit

This refers to the surplus remaining after subtracting both visible and hidden costs from total revenues, highlighting a firm's genuine financial gain.

Annual Profit

Annual profit refers to the total profit a business earns over the course of a fiscal year, accounting for all revenues minus expenses during that period.

Variable Costs

Costs that vary directly with the level of production or service activity, such as materials and labor.