Croy Inc. has the following projected sales for the next five months: ales in Un

Question

Croy Inc. has the following projected sales for the next five months: ales in Units Month April May June July August 3400 3,020 4,540 1,120 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 $3.40 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 3,694 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 Mateal Purchased

Explanation / Answer

1)Budgeted Production

2)Unit Produced In july : 4120+[3910*.70]-2884

             = 3973

April May June Unit sales 3400 3020 4540 Ending Finished Inventory desired 2114   [3020*.70] 3178   [4540*.7] 2884 [4120*.7] less:Beginning Finished goods inventory (2380)    [3400*.70] (2114) (3178) Unit to be produced 3134 4084 4246

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