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:

A) $358,192
B) $150,304
C) $304,512
D) $454,816

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:

A) $358,192
B) $150,304
C) $304,512
D) $454,816

Haley Jacobs · Accepted Answer

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

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