1) The Svelte Jeans Company produces two different types of jeans. One is called
ID: 2474999 • Letter: 1
Question
1) The Svelte Jeans Company produces two different types of jeans. One is called the Simple Life and the other is called the Fancy Life. The company sales budget estimates that 350,000 of the Simple Life Jeans and 200,000 of the Fancy Life will be sold during 20XX. The production budget requires 353,500 units of Simple Life jeans and 196,000 Fancy Life jeans manufactured. The Simple Life jeans require 3 yards of denim material, a zipper, and 25 yards of thread. The Fancy Life jeans require 4.5 yards of denim material, a zipper, and 40 yards of thread. Each yard of denim material costs $3.25, the zipper costs $.75 each, and the thread is $.01 per yard. There is enough material to make 2,000 jeans of each type at the beginning of the year. The desired amount of materials left in the ending inventory is to have enough to manufacture 3,500 jeans of each type. Prepare a direct material purchases budget.
Explanation / Answer
We summarize as
Simple life jeans fancy life jeans Production units 353500 196000 Add: Requiremnts for closing inventory 3500 3500 Less: Requirements available in opening invenotry 2000 2000 Net raw material required to be purchased for 355000 197500 Total Raw material required to be purchased for (units) 355000 197500 denim material required Simple life = 355000 x 3 yards per jean 1065000 Fancy life = 197500 x 4.5 yards per jean 888750 Total Denim Material required 1065000 888750 1953750 Zipper required 1 zipper per unit 355000 197500 Total Zipper required 355000 197500 552500 thread Simple life = 355000 x 25 yards 8875000 fancy life = 197500 x 40 7900000 Total Thread required 8875000 7900000 16775000Related Questions
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