The Mendez Company has prepared a sales budget of 40,000 finished units for a 3-
ID: 2542814 • Letter: T
Question
The Mendez Company has prepared a sales budget of 40,000 finished units for a 3-month period. The company has an inventory of 12,000 units of finished goods on hand at December 31 and has a target finished goods inventory of 13,000 units at the end of the succeeding quarter. It takes 3 gallons of direct materials to make one unit of finished product. The company has inventory of 60,000 gallons of direct materials at December 31 and has a target ending inventory of 54,000 gallons at the end of the succeeding quarter How many galions of direct materiabs should Mendez Company purchase during the 3 months ending March 31? Select the labels and enter the amounts to calculate the direct materials(gallons) to be purchased Direct Material Purchases Budget For the 3 Months Ending March 31 Purchases to be made (in galilons) Choose trom any list or enter any number in the input fields and then continue to the next question. 0 of oo Chapter 0 Sample Test-Enter Answers archExplanation / Answer
Answer
Budgeted sale of finished units
40000
Targeted Finished goods inventory
13000
Total requirement of finished units
53000
(-) Opening finished units inventory
12000
Finished units to be produced
41000
Direct material required [41000 x 3 gallons]
123000 gallons
Budgeted direct material requirement
123000 gallons
Target ending inventory
54000 gallons
Total requirement
177000 gallons
(-) Opening material inventory
60000 gallons
Purchases to be made (in gallons)
117000 gallons
Budgeted sale of finished units
40000
Targeted Finished goods inventory
13000
Total requirement of finished units
53000
(-) Opening finished units inventory
12000
Finished units to be produced
41000
Direct material required [41000 x 3 gallons]
123000 gallons
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