Balmforth Products, Inc

question 104

Multiple Choice

Balmforth Products, Inc. makes and sells a single product called a Bik. It takes three yards of Material A to make one Bik. Budgeted production of Biks for the next five months is as follows: The company wants to maintain monthly ending inventories of Material A equal to 20% of the following month's production needs. On January 31, this target had not been attained since only 2,000 yards of Material A were on hand. The cost of Material A is $0.80 per yard. The company wants to prepare a Direct Materials Purchases Budget.
-The desired ending inventory of Material A for the month of March is:

• A)9,300 yards
• B)7,140 yards
• C)3,100 yards
• D)8,400 yards

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Definitions:

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