Question 2

Tony's Fashions forecasts sales of $310,000 for the quarter ended December 31. The company's gross profit rate averages 20% of sales. Inventory as of September 30 is $110,000. If the December 31^st inventory is targeted at $50,000, budgeted purchases for the quarter should be:

Multiple Choice

• $138,000.

• $172,000.

• $188,000.

• $200,000.

• $248,000.

Ardel Co. budgeted to sell 222,000 units of Zbox in September. Production of one unit of Zbox requires three pounds of aluminum and five pounds of steel powder. The beginning inventory and the desired ending inventory are as follows:

	Beginning Inventory			Desired Ending Inventory
Zbox	35,000	units		24,000	units
Aluminum	41,000	pounds		34,000	pounds
Steel powder	37,000	pounds		42,000	pounds

How many pounds of steel powder does Ardel Co. need to purchase during September if Ardel plans to manufacture 161,000 units of Zbox in September?

Multiple Choice

• 769,000 pounds.

• 800,000 pounds.

• 805,000 pounds.

• 810,000 pounds.

• 841,000 pounds.