Fuson Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Credit sales are collected:
30% in the month of the sale
70% in the following month
Raw materials purchases are paid:
30% in the month of purchase
70% in the following month
The ending finished goods inventory should equal 10% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs.
The estimated finished goods inventory balance at the end of November is closest to:

Question

Fuson Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations:   Credit sales are collected:
30% in the month of the sale
70% in the following month
Raw materials purchases are paid:
30% in the month of purchase
70% in the following month
The ending finished goods inventory should equal 10% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs.
The estimated finished goods inventory balance at the end of November is closest to:

Quizplus · Accepted Answer

The estimated unit product cost is computed as follows:
 11eacbfc_c5f1_d9bb_8ffe_cfbc000be823_TB7552_00 The estimated finished goods inventory balance at the end of November is computed as follows:
 11eacbfc_c5f1_d9bc_8ffe_09163e193298_TB7552_00 *December sales of 13,700 units × 10% = 1,370 units

Fuson Corporation Makes One Product and Has Provided the Following