Multiple Choice
A company has provided a sales budget for the next four months.It bases its production budget on the sales budget, and has a policy that each month's ending inventory of finished product must be equal to 25% of the following month's sales needs.The direct materials purchases budget is based on the production budget.The company's policy for each month's ending inventory of raw materials is that they must be equal to 10% of the following month's production needs for raw materials.Given this information, the company can prepare direct materials purchases budgets for how many months?
A) One
B) Two
C) Three
D) Four
E) Five
Correct Answer:
Verified
Correct Answer:
Verified
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