Question
In: Accounting
Coleman, Inc. anticipates sales of 48,000 units, 46,000 units, 49,000 units and 48,000 units in July,...
Coleman, Inc. anticipates sales of 48,000 units, 46,000 units, 49,000 units and 48,000 units in July, August, September and October, respectively. Company policy is to maintain an ending finished-goods inventory equal to 40% of the following month's sales. On the basis of this information, how many units would the company plan to produce in September?
46,000.
46,800.
47,200.
48,600.
Some other amount.
Tidewater plans to sell 91,000 units of product no. 794 in May,
and each of these units requires 3 units of raw material. Pertinent
data follow.
| Product No. 794 | Raw Material | |
| Actual May 1 inventory | 11,600 units | 29,600 units |
| Desired May 31 inventory | 17,600 units | 20,600 units |
On the basis of the information presented, how many units of raw
material should Tidewater purchase for use in May production?
246,000.
264,000.
282,000.
300,000.
Some other amount.
An examination of Shorter Corporation's inventory accounts
revealed the following information:
Raw materials, June 1: 46,200 units
Raw materials, June 30: 51,200 units
Purchases of raw materials during June: 187,000 units
Shorter's finished product requires four units of raw materials. On
the basis of this information, how many finished products were
manufactured during June?
45,500.
48,000.
58,300.
71,100.
Some other amount.
Solutions
Expert Solution
Solution 1:
Estimated september production = Estimated sales for september + Desired ending inventory for september - Estimated beginning inventoty
= 49000 + (48000*40%) - (49000*40%) = 48600 units.
Hence last option is correct.
Solution 2:
| Direct material purchase budget - May | |
| Particulars | Amount |
| Estimated sales units | 91000 |
| Add: Desired ending inventory | 17600 |
| Less: Budgeted beginning inventory | 11600 |
| budgeted production units | 97000 |
| Raw Material required per unit | 3 |
| Estimated raw material requirement | 291000 |
| Add: Desired ending inventory of raw material | 20600 |
| Less: Budgeted beginning inventory of raw material | 29600 |
| Budgeted raw material purchase units | 282000 |
Hence 3rd option is correct.
Solution 3:
Raw material consumed = Beginning inventory + Purchases of raw material - ending inventory of raw material
= 46200 + 187000 - 51200 = 182000 units
Raw material requirement per unit of finished goods = 4 units
Finished products manufactured during June = 182000 / 4 = 45500 units
Hence first option is correct.
ekkarill92 answered 1 year agoRelated Solutions
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