Question 21 3.333 pts Slow Glow Candle Co. projected sale of 78,000 candles for

Question

Question 21 3.333 pts Slow Glow Candle Co. projected sale of 78,000 candles for 2012. The estimated January 1, 2012, inventory is 3,600 units, and the desired December 31, 2012, inventory is 4,500 units. What is the budgeted production in units for 2012? 78,900 78,000 82.500 O None of the above answers are correct. Question 22 3.333 pts Soft Glow Candle Co. budgeted production of 78,900 candles in 2012. Wax is required to produce a candle. Assume 8 ounces (one half of a pound) of wax is required for each candle. The estimated January 1, 2012, wax inventory is 2,000 pounds. The desired December 31, 2012, wax inventory is 2.400 pounds. If candle wax costs $3.20 per pound, what is the total pounds to be purchased? O 39.450 pounds O 41,850 pounds 39,850 O None of the above answers are correct.

Explanation / Answer

Ending Inventory = Opening Inventory + Purchases - Sales

4,500 = 3,600 + Purchases - 78,000

Hence Purchases = 78,000 + 4,500 -3,600

= 78,900

Hence the correct answer is 78,900

Total Candles to be Produced = 78,900

Hence, Total Wax Required = 78,900 Candles * 1/2 Pound

= 39,450 Pounds

Opening Inventory = 2,000 Pounds

Closing Inventory Required = 2,400 Pounds

Hence, Pounds to be Purchased :

Closing Inventory Required = Opening Inventory + Pounds Purchased - Pounds Used

2,400 = 2,000 + Pounds to be Purchased - 39,450 Pounds

or Pounds to be Purchased = 39,850 Pounds

Hence the correct answer is 39,850

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