A company that currently produces final product A is considering stopping processing earlier in the production process and selling the intermediate product on the market. The final product sells for $$100$ per unit, whereas the firm believes it can sell the partially processed intermediate product for $$75$ per unit. The firm sells $1,000$ units per quarter and faces a total finished processing cost of $$10,000$ per quarter after split$-$off.

Should the firm sell the intermediate good or the final good?

The intermediate good, because final good sales decrease profits by $$15,000$

The final good, because final good sales increase profits by $$15,000$

The final good, because final good sales increase profits by $$25,000$

The intermediate good, because final good sales decrease profits by $$25,000$

What is an advantage of budgeting?

It communicates managements plans to stockholders.

It allows for allocating of resources to customers.

It helps uncover bottlenecks after they occur.

It forces managers to think about and plan for the future.

It is January $1$ of Year $2.$ Company sales for January, February, and March are forecasted as follows:

January: $$20,000$

February: $$40,000$

March: $$50,000$

Seventy percent of sales are credit sales, and the remaining $30\%$ of sales are cash sales. Of these credit sales, $40\%$ are collected during the month of sale, $35\%$ in the following month, $20\%$ in the second following month, and $5\%$ are never collected.

Total sales for November and December of Year $1$ were $$25,000$ and $$40,000,$ respectively.

What is the expected amount of total cash collections from sales in March?

$$26,600$

$$38,000$

$$41,600$

$$43,600$

On September $30$ of Year $1,$ a company had finished goods inventory of $2,000$ units. Starting in October, the company intends to have an inventory policy of maintaining ending inventory at the end of every month equal to $20\%$ of next month's sales.

The forecasted sales for the months October, Year $1$ through January, Year $2$ are as follows:

October $4,400$ units

November $7,000$ units

December $8,000$ units

January $4,000$ units

What is the amount of budgeted production units for October?

$3,800$

$4,600$

$5,400$

$7,400$