11. Clic Inc., provides the following data for the next four months: April May J

Question

11. Clic Inc., provides the following data for the next four months:

April May June July

Unit Sales 500 580 530 600

Ending Raw Materials Inventory 663 lbs.

Ending Finished Goods Inventory 174 Units

Desired Ending Inventory:

Raw Materials = 30% of next month's production needs

Finished Goods = 20% of next month's sales

Pounds of raw material required for each finished Unit = 5 lbs.

Required:

Calculate the amount of purchases of raw materials in pounds for April and May.

Please show all work and computations

Explanation / Answer

Hi,

Please find the answer as follows;

Answer is 2402 (April) and 2811 (May)

Thanks.

April May June Sales 500 580 530 Add Desired Ending Inventory of Finished Goods 116 106 120 Total 616 686 650 Less Opening Inventory of Finished Goods -174 -116 -106 Total Production Needed (A) 442 570 544 Pounds of Raw Material Per Unit (B) 5 5 5 Total Pounds Needed to meet the Production (A*B) 2210 2850 2720 Add Desired Ending Inventory of Raw Materials 855 816
Total 3065 3666
Less Opening Inventory of Raw Materials -663 -855
Purchases of Raw Materials in Pound 2402 2811

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