The Following Are Budgeted Data: One Pound of Material

question 15

Multiple Choice

The following are budgeted data: One pound of material is 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 February would be budgeted to be:

• A)19, 000 pounds
• B)19, 200 pounds
• C)23, 000 pounds
• D)18, 800 pounds

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Definitions:

Maturity Value

The amount that is due at the maturity or due date of a note, which is the sum of the face amount and any interest.

Note Payable

A written agreement to pay a specific amount of money, plus interest, by a certain date or upon demand.

Discounted Note

A promissory note whose face value is reduced because it is sold or redeemable for less than its face value before its maturity date.

Maturity

The date on which a financial instrument (such as a bond, loan, or another form of debt) reaches its due date and the principal must be repaid.