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

Question

Croy Inc. has the following projected sales for the next five months Month April May June July August Sales in Units 3,450 3,940 4,540 4,105 3,910 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 $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 3,793 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 materials purchased for April, May, and June. (Use rounded Budgeted Production units in intermediate calculations. Round your answers to 2 decimal places.) April May June Budgeted Cost of Material Purchased

Explanation / Answer

1) Production budget :

2) Budgeted cost of material purchased :

April May June Sales 3450 3940 4540 Add: Desired ending inventory 2758 3178 2874 Total needs 6208 7118 7414 Less: Beginning inventory -2415 -2758 -3178 Budgeted production (units) 3793 4360 4236

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