Question 4

1. XX Co. budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for the fiscal year of July 1st, 2016, through June 30th, 2017.

   July 1, 2016 June 30, 2017

   Raw material¹ 30,000 15,000

   Work in process 8,000 8,000

   Finished goods 30,000 5,000

   ¹ Three (3) units of raw material are needed to produce each unit of finished product.

   If XX plans to sell 250,000 units during the budgeted year, the number of units it would have to manufacture during the year would be:

   	a.	505,000 units
   	b.	500,000 units
   	c.	none of the above
   	d.	480,000 units

Question 5

1. XX Co. budgets on an annual basis for its fiscal year. The following beginning and ending inventory levels (in units) are planned for the fiscal year of July 1st, 2016, through June 30th, 2017.

   July 1, 2016 June 30, 2017

   Raw material¹ 30,000 15,000

   Work in process 8,000 8,000

   Finished goods 30,000 5,000

   ¹ Three (3) units of raw material are needed to produce each unit of finished product.

   If 480,000 finished units were to be manufactured during the year, the units of raw material needed to be purchased would be:

   	a.	465,000 units
   	b.	660,000 units
   	c.	1,425,000 units
   	d.	none of the above