Croy Inc. has the folloing projected sales for the next five months April May Ju

Question

Croy Inc. has the folloing projected sales for the next five months April May June July August 3,560 3,885 4,530 4,195 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 $3.50 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 3,774 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.) 3,774 43314294 2. Determine the budgeted cost of materials purchased for Apni, May, and June. (Use rounded Budgeted Production units in intermediate calculations. Round your answers to 2 decimal places.) of Matera. 20.788 250s 7,644 00? -7,087 75? Purchased

Explanation / Answer

PRODUCTION BUDGET APRIL MAY JUNE QUARTER JULY AUGUST Budgeted Sales Units 3,560 3,865 4,530 11,955 4,195 3,930 Add: Desired Ending Finished inventory 2,706 3,171 2,937 2,937 2,751 Total Needs 6,266 7,036 7,467 14,892 6,946 Less: Beginning Finished Inventory 2,492 2,706 3,171 2,492 2,937 Required Production in units 3,774 4,330 4,296 12,400 4,009 RAW MATERIAL PURCHASE BUDGET APRIL MAY JUNE QUARTER JULY Budgeted Production units 3,774 4,330 4,296 12,400 4,009 Raw material required per unit 2 2 2 2 2 Total Production needs 7,548 8,660 8,592 24,800 8,018 Add: Desired Ending Inventory 2,165 2,148 2,005 2,005 Total needs 9,713 10,808 10,597 26,805 Less: Beginning Inventory 3,774 2,165 2,148 3,774 Purchase Units 5,939 8,643 8,449 23,031 Cost price per unit 3.50 3.50 3.50 3.50 Budgeted Purchase in $ 20,787 30,251 29,570 80,609

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