Assume that a company expects to produce 10,600, 11,600, and 13,600 units of finished goods in January, February, and March, respectively. Each unit of finished goods requires 3 pounds of raw material and each pound of raw material costs $2.50. The company always maintains an ending raw materials inventory equal to 20% of next month’s production needs. What is the amount of expected raw materials purchases for February? Multiple Choice $90,000 $54,000 $86,400 $43,080
Assume that a company expects to produce 10,600, 11,600, and 13,600 units of finished goods in January, February, and March, respectively. Each unit of finished goods requires 3 pounds of raw material and each pound of raw material costs $2.50. The company always maintains an ending raw materials inventory equal to 20% of next month’s production needs. What is the amount of expected raw materials purchases for February? Multiple Choice $90,000 $54,000 $86,400 $43,080
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Time Remaining 43 minutes 55 seconds
00:43:55Item 14
Time Remaining 43 minutes 55 seconds
00:43:55Assume that a company expects to produce 10,600, 11,600, and 13,600 units of finished goods in January, February, and March, respectively. Each unit of finished goods requires 3 pounds of raw material and each pound of raw material costs $2.50. The company always maintains an ending raw materials inventory equal to 20% of next month’s production needs. What is the amount of expected raw materials purchases for February?
Multiple Choice
-
$90,000
-
$54,000
-
$86,400
-
$43,080
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