Croys finished goods inventory policy is to have 60% of the next month\'s sales

Question

Croys finished goods inventory policy is to have 60% of the next month's sales on hand at the end of each month. Direct material costs $2.80 per pound. And each unit requires 2 lb. Raw materials inventory policy is to have 50% of the next month's production needs on hand at the end of each month. Raw materials on hand at March 31st total 3701 lb.

Croy Inc. has the following projected sales for the next five months: Month April May June July August Sales in Units 3,410 3,895 4,520 4,190 3,920 Croy's finished goods inventory policy is to have 60 percent of the next month's sales on hand at the end of each month. Direct material costs $2.80 per pound, and each unit requires 2 pounds Raw materials inventory policy is to have 50 percent of the next month's production needs on hand at the end of each month. Raw materials on hand at March: 31 totaled 3,701 pounds Required 1. Determine budgeted production for April, May, and June. (Do not round your intermediate calculations and round your final answer to the nearest whole number) April May June Budgeted Production (Units) 2. Determine the budgeted cost of matenials purchased for Apri. May and June, (Use rounded Budgeted Production units in intermediate calculations. Round your answers to 2 decimal places.) Apnil May Budgeted Cost of Material Purchased

Explanation / Answer

Ans :

1. Statement showing budgeted produciton for April, May and June:

Working note 1 : statement showing calculation of Inventory

Note 1 : opening inventory of each month is ending inventory of previous month.

2. Statement showing calculation cos of raw material purchased:

Working note 2 :

Particulars April May June July Sales 3410 3895 4520 4190 Add :Ending Inventory ( working note 1) 2337 2712 2514 2352 Less :Opening Inventory ( working note 1) 2046 2337 2712 2514 Production 3701 4270 4322 4028

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.