Asked by Julie Smith on May 19, 2024
Verified
Stut Corporation, a retailer, plans to sell 28,000 units of Product X during the month of August. If the company has 6,000 units on hand at the start of the month, and plans to have 9,000 units on hand at the end of the month, how many units of Product X must be purchased from the supplier during the month?
A) 37,000
B) 25,000
C) 31,000
D) 28,000
Product X
A placeholder name commonly used to refer to a generic or hypothetical product for illustrative purposes in discussions or analyses.
Supplier
An entity that provides goods or services to another organization, playing a crucial role in the supply chain.
- Absorb the principles and architectures of different budget types, such as sales, manufacturing overhead, cash, direct materials, and production budgets.
- Apply principles of financial planning to calculate the production quantities needed, taking into account sales forecasts and inventory obligations.
Verified Answer
AD
Aliya DorsettMay 22, 2024
Final Answer :
C
Explanation :
To determine how many units of Product X must be purchased from the supplier, we need to first calculate the total units required during the month of August.
Total Units Required = Units to be sold + Desired ending inventory - Beginning inventory
Total Units Required = 28,000 + 9,000 - 6,000
Total Units Required = 31,000
Therefore, Stut Corporation must purchase 31,000 - 6,000 = 25,000 units of Product X from the supplier during the month of August.
The correct answer is C, 31,000.
Total Units Required = Units to be sold + Desired ending inventory - Beginning inventory
Total Units Required = 28,000 + 9,000 - 6,000
Total Units Required = 31,000
Therefore, Stut Corporation must purchase 31,000 - 6,000 = 25,000 units of Product X from the supplier during the month of August.
The correct answer is C, 31,000.
Learning Objectives
- Absorb the principles and architectures of different budget types, such as sales, manufacturing overhead, cash, direct materials, and production budgets.
- Apply principles of financial planning to calculate the production quantities needed, taking into account sales forecasts and inventory obligations.
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