Knowledge Check 01

For a production budget, the ______ is the beginning inventory for the year.

• beginning inventory for the first quarter

• beginning inventory for the last quarter

• ending inventory for the last quarter

• sum of beginning inventories for the four quarters

Knowledge Check 02

Which of the following is a major factor that should be taken into consideration while planning the desired level of inventories?

• Costs of carrying inventory.

• General administrative policy of the company.

• Selling price of the finished product.

• Statutory requirements.

Knowledge Check 03

Vineyard Corporation, a manufacturer of fine wines, began the year with 20,000 bottles in inventory. The company estimated the budgeted sales for the four quarters of the current year to be 200,000 bottles, 150,000 bottles, 250,000 bottles, and 400,000 bottles, respectively. The management feels that an ending inventory of 10% of the subsequent quarter's sales is appropriate. What are the production needs for the first quarter?

• 160,000 bottles

• 175,000 bottles

• 195,000 bottles

• 215,000 bottles

Knowledge Check 04

Vineyard Corporation, a manufacturer of fine wines, began the year with 20,000 bottles in inventory. The company estimated the budgeted sales for the four quarters of the current year to be 200,000 bottles, 150,000 bottles, 250,000 bottles, and 400,000 bottles, respectively. The management feels that an ending inventory of 10% of the subsequent quarter's sales is appropriate. What is the desired ending inventory for the second quarter?

• 15,000 bottles

• 20,000 bottles

• 25,000 bottles

• 40,000 bottles