Sevenbergen 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:
40% in the month of the sale
60% 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 20% of the following month's sales. The ending raw materials inventory should equal 30% of the following month's raw materials production needs.
The budgeted required production for August is closest to:

Question

Sevenbergen 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:
40% in the month of the sale
60% 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 20% of the following month's sales. The ending raw materials inventory should equal 30% of the following month's raw materials production needs.
The budgeted required production for August is closest to:

Quizplus · Accepted Answer

The budgeted required production for August is computed as follows:
 11eacbfc_c5e3_a9aa_8ffe_e9ce01f62592_TB7552_00 *September sales of 10,400 units × 20% = 2,080 units
** August sales of 11,300 units × 20%= 2,260 units

Sevenbergen Corporation Makes One Product and Has Provided the Following