RyRy, Inc. manufactures dance apparel. Unit sales projections for the first five
ID: 2430852 • Letter: R
Question
RyRy, Inc. manufactures dance apparel. Unit sales projections for the first five months of the upcoming year are as? follows
Month
Unit Sales
January
3,400
February
?3,800
March
?3,300
April
4,900
May
?5,000
Beginning finished goods inventory consisted of 950 units. The desired inventory of units at the end of each month in the upcoming year should equal? 25% of the following? month’s budgeted unit sales.
Each unit requires 2 yards of fabric. The company wants to have? 20% of the fabric required for the next? month’s expected production on hand at the end of each month. This inventory requirement was met at the end of the previous year. The fabric costs? $0.20 per yard.
What is the expected dollar amount of raw material purchases for the first quarter of the upcoming? year? (round to the nearest dollar and use commas where?appropriate)
Month
Unit Sales
January
3,400
February
?3,800
March
?3,300
April
4,900
May
?5,000
Explanation / Answer
Jan Feb Mar Budgeted sales (in units) 3400 3800 3300 Add: Desired ending finished goods inventory 950 825 1225 (25% of following months budgeted unit sales) (3800*25%) (3300*25%) (4900*25%) Total sales required in units 4350 4625 4525 Less: Beginning finished goods inventory 950 950 825 (Given) (3800*25%) (3300*25%) Units to be produced (in units) 3400 3675 3700 Raw material needed per unit in yards 2 2 2 Raw material required (in yards) 6800 7350 7400 Add: Desired units of ending raw material inventory 1470 1480 1960 (20% of next months expected production) (7350*20%) (7400*20%) (4900*2*20%) Total units of raw material needed 8270 8830 9360 Less: Beginning raw material inventory 1360 1470 1480 (20% of current months expected production) (6800*20%) (7350*20%) (7400*20%) Units of raw material to be purchased 6910 7360 7880 Unit cost per yard 0.2 0.2 0.2 Cost of raw material purchases in $ 1382 1472 1576
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.