A company's production budget indicates the following production requirements: October, 229,000 units; November 194,000 units, and December, 129,000 units. Each unit of finished goods requires 4 pounds of raw materials that cost $3.50 per pound. The company maintains raw materials inventory equal to 25% of the next month's production requirements. The company pays for 40% of its raw material purchases in the month of purchase. The remainder is paid the next month. The company’s accounts payable balance at the end of November is closest to:
A company's production budget indicates the following production requirements: October, 229,000 units; November 194,000 units, and December, 129,000 units. Each unit of finished goods requires 4 pounds of raw materials that cost $3.50 per pound. The company maintains raw materials inventory equal to 25% of the next month's production requirements. The company pays for 40% of its raw material purchases in the month of purchase. The remainder is paid the next month. The company’s accounts payable balance at the end of November is closest to:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company's production budget indicates the following production requirements: October, 229,000 units; November 194,000 units, and December, 129,000 units. Each unit of finished goods requires 4 pounds of raw materials that cost $3.50 per pound. The company maintains raw materials inventory equal to 25% of the next month's production requirements. The company pays for 40% of its raw material purchases in the month of purchase. The remainder is paid the next month. The company’s accounts payable balance at the end of November is closest to:
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