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SpyIntel [72]
3 years ago
14

The following table presents Generic Motors Company's production budget. GM's inventory policy is to have ending inventory equal

to20% of next month's sales.
February March April
Ending inventory 5,000
Beginning inventory 2,000
Budgeted sales 13,000 17,000 18,000
Budgeted production
Required:
a) Fill in the missing numbers in the table above.
(Hint if you get stuck: What is the relation between ending inventory for one month and beginning inventory for the following month?)
b) Why do firms want to hold inventory of finished goods? (an alternative could be to produce exactly the amount they are going to sell, and hold zero inventories)
Business
1 answer:
Irina18 [472]3 years ago
6 0

Answer:

a.

________________________________February__March__April

Ending inventory 20% of next Months sale _3400___3600__5,000

Beginning inventory__________________ 2,000__ 3400__ 3600

Budgeted sales _____________________ 13,000__17,000_ 18,000

Budgeted production_________________ 14,400__ 17,200_ 19,400

b.

Firms wants to hold the finished goods inventry in order to deal with the future demand

Explanation:

a.

Use the following formula to calculate the Budgeted production

Budgeted Production = Beginning Inventory - Ending Inventory + Busgeted Sales

Working

________________________________February__March__April

Ending inventory 20% of next Months sale _3400___3600__5,000

Less: Beginning inventory______________2,000__ 3400__ 3600

Add: Budgeted sales _________________ 13,000__17,000_ 18,000

= Budgeted production________________14,400__ 17,200_ 19,400

b.

The finished goods inventory is held to deal with the future market demand. If the firm produce the uniits equals o the current demand then in case of increase in demand or unexpected demand increase the firms will not be able to fulfil the demand and will lose the opportunity.

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The technology involved in RFID (Radio Frequency Identification) has traditionally been used to ______.
Nookie1986 [14]

Answer:

d) manage inventory prior to items reaching the sales floor

Explanation:

RFID (Radio Frequency Identification) systems transferred inventory management as pioneers in automatic identification. Prior RFID, the warehouse workers had to manually check items through barcodes. Therefore, RFID transformed the whole inventory segment.

Afterward came the other applications of RFID.

8 0
3 years ago
Ehler Corporation sells rock-climbing products and also operates an indoor climbing facility for climbing enthusiasts. During th
DaniilM [7]

Answer:

Ehler Corporation

a) Journal Entries:

Sept. 1  Debit Inventory $12,000

Credit 6%, 3-month Notes Payable (Pippen) $12,000)

To record issuance of note to purchase inventory.

Sept.  30 Debit Interest expense $60

Credit Interest Payable $60

To accrue interest expense ($12,000 * 6% * 1/12).

Oct.  1 Debit Climbing Wall $16,500

Credit 8%, 4-month Note Payable (Prime Bank) $16,500

To record issuance of note payable to purchase climbing wall.

Oct.  31 Debit Interest expense $170

Credit Interest payable $170

To accrue interest expense ($60 + $16,500 * 8% * 1/12).

Nov.  1 Debit Vehicle $26,000

Credit Cash $8,000

Credit 6%, 12-month Note Payable $18,000

To record the purchase of a new vehicle for climbers.

Nov.  30 Debit Interest expense $260

Credit Interest payable $260

To accrue interest expense ($170 + $18,000 * 6% * 1/12).

Dec.  1 Debit 6% Notes Payable (Pippen) $12,000)

Debit Interest payable $180

Credit Cash $12,180

To record the payment of principal and interests.

Dec.  31 Debit Interest expense $200

Credit Interest payable $200

To accrue interest expense ($110 + $90)

b) T-accounts:

Notes Payable

Date      Account Titles            Debit      Credit

Sept. 1    Inventory                                 $12,000

Oct.  1    Climbing Wall                             16,500

Nov.  1    Vehicle                                      18,000

Dec.  1    Cash                       $12,000

Dec. 31  Balance                   34,500

Interest Payable

Date       Account Titles            Debit      Credit

Sept.  30 Interest expense                          $60

Oct.  31    Interest expense                           170

Nov.  30  Interest expense                          260

Dec.  1     Cash                            $180

Dec.  31   Interest expense                         200

Dec. 31   Balance                       $510

Interest Expense

Date       Account Titles            Debit      Credit

Sept.  30 Interest payable           $60

Oct.  31    Interest payable            170

Nov.  30  Interest payable           260

Dec.  31   Interest payable           200

Dec. 31   Income summary                     $690

c) Balance Sheet:

Current liabilities:

Interest payable          $510

Notes payable       $34,500

d) Total interest expense = $690

Explanation:

a) Data and Analysis:

Sept. 1  Inventory $12,000 6% Notes Payable (Pippen) $12,000) to purchase inventory. The 3-month note payable

Sept.  30 Interest expense $60 Interest payable $60 ($12,000 * 6% * 1/12)

Oct.  1 Climbing Wall $16,500 8%, 4-month Note Payable (Prime Bank) $16,500

Oct.  31 Interest expense $170 Interest payable $170 ($60 + $16,500 * 8% * 1/12)

Nov.  1 Vehicle $26,000 Cash $8,000 6%, 12-month Note Payable $18,000

Nov.  30 Interest expense $260 Interest payable $260 ($170 + $18,000 * 6% * 1/12)

Dec.  1 6% Notes Payable (Pippen) $12,000) Interest payable $180 Cash $12,180

Dec.  31 Interest expense $200 Interest payable $200

3 0
3 years ago
Suppose that Larry, an economist from a business school in Georgia, and Megan, an economist from a nonprofit organization on the
iVinArrow [24]
Where is the dialogue? :)
3 0
3 years ago
Assume real per capita GDP in West Swimsuit is $10,000 while in East Quippanova it is $2,500. The annual growth rate in West Swi
Alex787 [66]

Answer:

correct option is B. about 30 years

Explanation:

given data

real per capita GDP west = $10,000

annual growth rate = 2.33%

real per capita GDP east = $2,500

annual growth rate = 7%

to find out

How many years will it take for East  to catch up GDP of West

solution

we know here that future value is equal to real GDP of west after time  will be

future value = real per capita GDP west × rate^{t}

future value = 10000 × (1+0.0233)^{t} .....1

and

future value = real per capita GDP east × rate^{t}

future value = 2500 × (1+0.07)^{t} .....2

compare equation 1 and 2

10000 × (1+0.0233)^{t}  = 2500 × (1+0.07)^{t}

4 (1.0233)^{t}  =  (1.07)^{t}

t = about 30 years

so correct option is B. about 30 years

5 0
3 years ago
A master budget​ ________. A. is the initial plan of what the company intends to accomplish in the period and evolves from both
yaroslaw [1]

Answer:

The correct answer is option D) A Master Budget is is a substitute for the management functions of planning and coordination.

Explanation:

A master budget is not the initial budget a company makes, It is the final budget that incorporates all other specific budgets such as financial budget, operational budget, production budget, marketing budget and ore.

It serves a central  planning tool that a management team uses to direct the activities of a company, set targets and execution strategy.

It also provides a framework to judge performance for respective departments.

4 0
3 years ago
Read 2 more answers
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