Victoria Corporation manufactures quality vases. Budgeted sales and production d

Question

Victoria Corporation manufactures quality vases. Budgeted sales and production data for the vases are as follows January budgeted unit sales February budgeted unit sales March budgeted unit sales January budgeted unit production February budgeted unit production March budgeted unit production Raw material required for each finished unit (in pounds) 1,700 2,000 3,600 2,200 3,300 4,000 The ending inventory for each month should be equal to 20% of the next month's production needs. Each vase requires one pound of clay in its manufacture Victoria Corporation has a policy that the inventory of clay at the end of each month needs to be equal to 20% of the production needs for the following month. At the beginning of January, 440 pounds of clay were in inventory. How many pounds of clay would Victoria Corporation need to purchase in February? O A. 2,340 B. 2.420 O C. 4,140 O D. 3,440 Click to select your answer

Explanation / Answer

Calculation of pounds of clay Victoria Corporation need to purchase in Fabruary February Budgeted Production Units 3300 x Clay required for each unit (in pounds) 1 Total Requirement of Clay (in pounds) 3300 Add : Ending Inventory of Clay (in pounds) 800 Less : Beginning Inventory of Clay (in pounds) 660 Pounds of clay need to be purchased in February 3440 The answer is Option D.

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