Kesselring Corporation makes one product and has provided the following information to help prepare the master budget for the next three months of operations:
The ending finished goods inventory should equal 40% of the following month's sales.
The budgeted finished goods inventory balance at the end of August is closest to:

Question

Kesselring Corporation makes one product and has provided the following information to help prepare the master budget for the next three months of operations:
  The ending finished goods inventory should equal 40% of the following month's sales.
The budgeted finished goods inventory balance at the end of August is closest to:

Quizplus · Accepted Answer

The estimated unit product cost is computed as follows:
 11ea7761_17ae_b569_81a5_d3e4bc63899f_TB2580_00 The estimated finished goods inventory balance at the end of August is computed as follows:
 11ea7761_17ae_b56a_81a5_7992eeda7e81_TB2580_00 *September sales of 12,200 units × 40% = 4,880 units

Kesselring Corporation Makes One Product and Has Provided the Following