Question
Francisco Corp. is in the business of manufacturing plastic bottles. In the current quarter, $100,000 was provided for materials procurement and 10,000 bottles were produced
Francisco Corp. is in the business of manufacturing plastic bottles. In the current quarter, $100,000 was provided for materials procurement and 10,000 bottles were produced against a budgeted production of 8,500 bottles. However, the extra production of 1,500 bottles had to be sold immediately at a price lower than the market price. Identify the most likely flaw in the budget prepared by Francisco Corp. which led to a sale at lower prices. A The sale price was overestimated. B The storage capacity required was underestimated. C The funds allocated were not adequate. D The production capacity was underestimated.
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