Question 1 - At the beginning of the year, Lakeview Corporation has 660 life vests in inventory. The company wants to have 2,100 vests in inventory at the end of the year and plans to sell 6,400 life vests during the year. How many life vests must Lakeview Corporation produce during the year?
a. 8,500
b. 3,640
c. 7,840
d. 9,160
Question 2 - The maintenance department at Continental Airlines is likely to be classified as a(n)
a. cost center.
b. investment center.
c. profit center.
d. revenue center.
Question 3 - Sander Enterprises prepared the following sales budget:
Month Budgeted Sales
March $8,000
April $13,000
May $12,000
June $14,000
The expected gross profit rate is 40% and the inventory at the end of February was $10,000. Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold.
What is the desired beginning inventory on June 1?
a. $1,440
b. $1,680
c. $1,120
d. $8,400