Walt\'s Whistles manufactures referee whistles. At the end of February, Walt\'s
ID: 2370738 • Letter: W
Question
Walt's Whistles manufactures referee whistles. At the end of February, Walt's has 2,000 pounds of steel for whistles in inventory. Walt's expects to produce and sell 50,000 whistles in March. Each whistle requires a standard quantity of 0.2 pounds of steel.Walt wants to have 5,000 pounds of steel in inventory at the end of March. Walt's has no whistles in beginning finished goods inventory and does not plan to have any whistles in ending finished goods inventory. Each pound of steel has a standard cost of $7.00.
Prepare Walt's purchase budget for steel in March. How much does Walt's expect to spend on steel in March?
Anticipated steel expenditure =
Explanation / Answer
Walt wants to make 50000 whistles in March. This requires 50000*(.2lbs)= 10000lbs of steel. He says he wants to have 5000lbs of steel left over for inventory. This means he needs 15,000lbs of steel for March. He has 2000lbs left over. 15000-20000=13,000lbs. 13,000($7)=$91,000
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