A Company's Inventory Balance at the End of the Year

question 110

Multiple Choice

A company's Inventory balance at the end of the year was $188,000 and $200,000 at the beginning of the year.Its Accounts Payable balance at the end of the year was $84,000 and $80,000 at the beginning of the year,and its cost of goods sold for the year was $720,000.The company's total amount of cash payments for merchandise during the year equals:

• A)$704,000.
• B)$712,000.
• C)$720,000.
• D)$728,000.
• E)$736,000.

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Definitions:

Chase Strategy

A production planning method that adjusts workforce levels and production rates to match demand, minimizing inventory levels and workforce costs.

Level Strategy

An inventory management strategy where production rates or workforce levels are kept constant despite demand fluctuations.

Formal Planning Model

A structured approach to planning that involves systematic procedures and methodologies to achieve specified objectives.

Pure Level Strategy

A production strategy where the output rates are kept constant and inventory is used to absorb fluctuations in demand.