A). 56600 pounds B). 42056 pounds C). 71144 pounds D). 36360 pounds Reaser Corpo

Question

A). 56600 pounds B). 42056 pounds C). 71144 pounds D). 36360 pounds

Reaser Corporation makes one product. July April 8,400 May June Budgeted unit sales 8,70012,6 13,10e Each unit of finished goods requires 4 pounds of raw materials. The ending finished goods inventory equals 10% of the following month's sales. The ending raw materials inventory equals 40% of the following month's raw materials production needs. If 50,600 pounds of raw materials are required for production in June, then the budgeted raw material purchases for May is closest to:

Explanation / Answer

Calculate budgeted raw material purchase for may :

so answer is b) 42056 pounds

Budgeted unit sale 8700 Add; desired ending inventory 1260 Total needs 9960 Less: Beginning inventory (870) Production in may 9090 Pounds for material 4 material for production 36360 Add: Desired ending inventory of raw material 20240 Total needs 56600 Less: Beginning ending inventory of raw material (14544) Raw material purchase 42056

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