Chandler Ltd. estimates sales for the second quarter of 2014 will be as follows.
ID: 2448097 • Letter: C
Question
Chandler Ltd. estimates sales for the second quarter of 2014 will be as follows.
Month
Units
The target ending inventory of finished products is as follows.
2 units of material are required for each unit of finished product. Production for July is estimated at 2,740 units to start building inventory for the fall sales period. Chandler’s policy is to have an inventory of raw materials at the end of each month equal to 60% of the following month’s production requirements.
Raw materials are expected to cost $4 per unit throughout the period.
Calculate the May raw materials purchases in dollars.
Month
Units
April 2,530 May 2,480 June 2,320Explanation / Answer
Your answer
Your answer
(All nos. of inventory in units) April May June Opening FG Inventory 2010 2230 2160 Production of FG 2750 2410 2550 Sales 2530 2480 2320 Closing FG Inventory 2230 2160 2390 Raw Material Purchases Opening Stock 1650 1446 1530 Purchases 5296 4904 5214 Utilised for Production 5500 4820 5100 Closing Stock 1446 1530 1644 Purchases in May (Qty .) 4904 Cost per unit 4 $ Total Purchase Cost in May 19616 $Related Questions
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