Kyoto, Inc. predicts the following sales in units for the coming four months: Ap

Question

Kyoto, Inc. predicts the following sales in units for the coming four months: April May June June Sales in Units ……….. 240 280 300 240 Although each month's ending inventory of finished units should be 60% of the next month's sales, the March 31 finished goods inventory is only 100 units. A finished unit requires five pounds of raw material B. The March 31 raw materials inventory has 200 pounds of B. Each month's ending inventory of raw materials should be 30% of the following month's production needs.

Calculate the budgeted purchases of pounds of raw material B during May

Explanation / Answer

                  April        May    June       July

Sales                                       240                 280                   300        240

Opening Inventory                   100                168                    180        144

Closing Inventory                     168                180                    144

Production                      308    292                 264                  

Rawmaterial required

     For above production          1,540            1,460               1,320

Opening stock of materail           200                438                  396

Closing stock of materail             438                396

Purchase of raw materail                            1,418

       B in May

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