Sleeter Corporation makes one product and it provided the following information

Question

Sleeter Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations:

Budgeted unit sales for April, May, June, and July are 7,500, 11,900, 10,800, and 14,800 units, respectively. All sales are on credit.

The ending finished goods inventory equals 30% of the following month's sales.

The ending raw materials inventory equals 30% of the following month’s raw materials production needs. Each unit of finished goods requires 6 pounds of raw materials. The raw materials cost $5.00 per pound.

If 72,000 pounds of raw materials are required for production in June, then the budgeted cost of raw material purchases for May is closest to:

Garrison 16e Rechecks 2017-09-30, 2017-10-09

Multiple Choice

$350,970

$347,100

$455,100

$559,230

Explanation / Answer

If 72,000 pounds of raw materials are required for production in June, then the budgeted cost of raw material purchases for May is closest to:

Garrison 16e Rechecks 2017-09-30, 2017-10-09

$559,230

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