The Following Are Budgeted Data: Two Pounds of Material

question 104

Multiple Choice

The following are budgeted data: Two pounds of material are 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.Purchases of raw materials for May should be:

• A)39, 200 pounds
• B)52, 000 pounds
• C)36, 800 pounds
• D)38, 000 pounds

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Definitions:

Borrow

The action of receiving something from another party with the intention of returning it or its equivalent at a later date.

Ordinary Annuity

A series of equal payments made at regular intervals over a specified period of time, with interest compounding at the end of each period.

Compounded Quarterly

Pertains to the process of calculating interest on a principal sum where the interest is added to the principal at the end of every quarter, thus interest in the next quarter is then earned on the new total.

Payments

Transactions by which goods, services, or obligations are paid for through the transfer of money or its equivalents.