Assume a company's sales budget for April and May is 41,000 units and 43,000 units, respectively. Its production budget for the same two months is 38,000 units and 39,000 units, respectively. Each unit of finished goods required 3 pounds of raw materials. The company always maintains raw materials inventory equal to 20% of the following months production needs. Also assume the company pays $2.50 per pound of raw material. It always pays for 60% of its raw material purchases in the month of purchase and the remainder in the following month. The accounts payable balance on March 31st is $141,000. What would be the accounts payable balance at the end of April? Multiple Choice $171,900 $176,900 $157,567
Assume a company's sales budget for April and May is 41,000 units and 43,000 units, respectively. Its production budget for the same two months is 38,000 units and 39,000 units, respectively. Each unit of finished goods required 3 pounds of raw materials. The company always maintains raw materials inventory equal to 20% of the following months production needs. Also assume the company pays $2.50 per pound of raw material. It always pays for 60% of its raw material purchases in the month of purchase and the remainder in the following month. The accounts payable balance on March 31st is $141,000. What would be the accounts payable balance at the end of April? Multiple Choice $171,900 $176,900 $157,567
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Assume a company's sales budget for April and May is 41,000 units and 43,000 units, respectively. Its production budget for the
same two months is 38,000 units and 39,000 units, respectively. Each unit of finished goods required 3 pounds of raw materials.
The company always maintains raw materials inventory equal to 20% of the following months production needs.
Also assume the company pays $2.50 per pound of raw material. It always pays for 60% of its raw material purchases in the month
of purchase and the remainder in the following month. The accounts payable balance on March 31st is $141,000. What would be the
accounts payable balance at the end of April?
Multiple Choice
$171,900
$176,900
$157,567
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