Croy Inc. has the following projected sales for the next five months: Month Sale

Question

Croy Inc. has the following projected sales for the next five months: Month Sales in Units April 3,560 May 3,810 June 4,550 July 4,110 August 3,990 Croy’s finished goods inventory policy is to have 70 percent of the next month’s sales on hand at the end of each month. Direct material costs $3.50 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 3,735 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.) 2. Determine the budgeted cost of materials purchased for April, May, and June. (Use rounded Budgeted Production units in intermediate calculations. Round your answers to 2 decimal places.)

Explanation / Answer

Production Budget April may june total July expected sale units 3,560 3,810 4,550 11,920 4,110 Add:Desired ending inventory 2667 3185 2877 2,877 2793 total needs 6,227 6,995 7,427 14,797 6,903 less:opening inventory 2492 2667 3185 2,492 2,877 production required 3,735 4,328 4,242 12,305 4,026 Materials budget April may june total jluy production required 3,735 4,328 4,242 12,305 4,026 pounds required per unit 2 2 2 2 2 total pounds 7470 8656 8484 24610 8052 Add:Desired inventory 4328 4242 4026 4026 total needs 11798 12898 12510 28636 less:openidng inventory 3,735 4328 4242 3735 total materials required 8,063 8570 8268 24,901 cost per pound 3.5 3.5 3.5 3.5 total materials cost 28220.5 29995 28938 87153.5

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

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