Question 1 (of 2 , save & Eon submit 10.00 points Exercise 14-8 Production and p

Question

Question 1 (of 2 , save & Eon submit 10.00 points Exercise 14-8 Production and purchases budgets LO 4,5 Gillman Co is forecasting sales or 61,900 units of product for August. To make one unit of tinished product, 6 pounds of raw materials are required Actual beginning and desired ending inventories of raw materials and finished goods are as tollows Raw materials (pounds) Finished goods (units) 73,100 5.550 68,700 8.150 Required: a. Calculate the number of units of product to be produced during August b. Calculate the number of pounds of raw materials to be purchased during August Type here to search ASUS

Explanation / Answer

Answer to Question 1 (Part a).

Number of Units to be produced = Budgeted Unit Sales + Desired Ending Inventory of Finished Goods – Beginning Inventory of Finished Goods
Number of Units to be produced = 61,900 + 8,150 – 5,550
Number of Units to be produced = 64,500 Units

Answer to Question 1 (Part b).

Number of Pounds purchased = Raw Materials required of Production + Desired Ending Raw Material – Actual Raw Material
Raw Materials required of Production = Number of Units to be produced * Raw material required per unit
Raw Materials required of Production = 64,500 * 6 Pounds
Raw Materials required of Production = 387,000 Pounds

Number of Pounds purchased = 387,000 + 68,700 – 73,100
Number of Pounds purchased = 382,600 Pounds

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