o Question 10 (of 11> Save & Exit 10.00 points Croy Inc. has the following proje
ID: 2527684 • Letter: O
Question
o Question 10 (of 11> Save & Exit 10.00 points Croy Inc. has the following projected sales for the next five months: Month April May June July August Sales in Units 3,510 3,840 4,620 4,185 3,930 Croy's finished goods inventory policy is to have 60 percent of the next month's sales on hand at the end of each month. Direct material costs $2.50 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 3,708 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 PurchasedExplanation / Answer
Since beginning finished goods inventory of April is not given, I am taking it as 0
Since sales of September is not given, Closing inventory of august cannot be calculated and so I am taking it as 0
The following table shows the calculations
Calculations Particulars April May June July August A Sales 3510 3840 4620 4185 3930 B = Next month A x 60% Closing inventory of finished goods 2304 2772 2511 2358 0 C = B of previous month Beginning inventory of finished goods 0 2304 2772 2511 2358 D = A + B - C Total finished goods required to be produced 5814 4308 4359 4032 1572 E Raw material required per unit 2 2 2 2 2 F = D x E Total direct material required for production 11628 8616 8718 8064 3144 G = Next month F x 50% Closing inventory of raw materials 4308 4359 4032 1572 0 H = G of previous month Beginning inventory of raw materials 3708 4308 4359 4032 1572 I = F + G - H Number of raw material purchased 12228 8667 8391 5604 1572 J Cost per unit of raw material 2.5 2.5 2.5 2.5 2.5 K = I x J Budgeted cost of raw materials purchased 30570.00 21667.50 20977.50 14010.00 3930.00Related Questions
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