Maximilian Computer Company uses a comprehensive budgeting system in planning its annual operations. Which of the following best describes the informa... Accounting MCQs | Accounting MCQs

Maximilian Computer Company uses a comprehensive budgeting system in planning its annual operations. Which of the following best describes the information needed to determine the budgeted cost of circuit boards to be purchased for use in building its laptop computer? Assume one circuit board is used in each laptop.

Begin with budgeted laptop sales in units, add the desired ending inventory of circuit boards, deduct the expected beginning inventory of circuit boards, and multiply the resulting amount by the budgeted purchase cost per circuit board.Begin with budgeted laptop sales in units, deduct the desired ending inventory of circuit boards, add the expected beginning inventory of circuit boards, and multiply the resulting amount by the purchase cost per circuit board. Begin with budgeted laptop production in units, deduct the desired ending inventory of circuit boards, add the expected beginning inventory of circuit boards, and multiply the resulting amount by the purchase cost per circuit board. Begin with budgeted laptop production in units, add the desired ending inventory of circuit boards, deduct the expected beginning inventory of circuit boards, and multiply the resulting amount by the budgeted purchase cost per circuit board. Show Result

Correct - Your answer is correct.

Wrong - Your answer is wrong.

Detailed Answer

Answer (D) is correct. Since each laptop requires exactly one circuit board, the beginning figure of the calculation equals the number of finished products to be produced:
Units needed for production X,XXX
Add: desired ending inventory XXX
Less: beginning inventory (XXX)
Raw material to be purchased X,XXX
Times: per-unit purchase price × $ X.XX
Total raw materials cost $X,XXX