Sarter Corporation Is in the Process of Preparing Its Annual

question 95

Multiple Choice

Sarter Corporation is in the process of preparing its annual budget.The following beginning and ending inventory levels are planned for the year. Each unit of finished goods requires 3 grams of raw material.The company plans to sell 880,000 units during the year. The number of units the company would have to manufacture during the year would be:

• A)900,000 units
• B)930,000 units
• C)880,000 units
• D)830,000 units

---

Definitions:

Net Profit Margin

A financial metric that measures how much of every dollar earned in revenue is translated into profit after all expenses are deducted.

After-tax Profit

The amount of net income left over after all taxes have been deducted from total revenues.

Inventory Turnover

A measure of how many times a company’s inventory is sold and replaced over a period, indicating efficiency in inventory management.

Cash-to-cash Cycle

The time duration it takes for a company to convert its investments in inventory and other resources into cash flows from sales.