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In: Accounting

Sill Corporation makes one product. Budgeted unit sales for January, February, March, and April are 9,900,...

Sill Corporation makes one product. Budgeted unit sales for January, February, March, and April are 9,900, 11,400, 11,900, and 13,400 units, respectively. The ending finished goods inventory equals 20% of the following month's sales. The ending raw materials inventory equals 40% of the following month’s raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. If 61,000 pounds of raw materials are required for production in March, then the budgeted raw material purchases for February is closest to:

Multiple Choice

  • 57,500 pounds
  • 104,900 pounds
  • 58,900 pounds
  • 81,900 pounds

Solutions

Expert Solution

Feb mar April
Sales units 11400 11900 13400
Add: ending inventory 2380 2680
Total 13780 14580
Less: Beginning inventory 2280 2380
Production units 11500 12200
Ram material req. per unit 5 5
Total Production needs 57500 61000
Add: ending inventory 24400
Total requirement 81900
Less: beginning inventory 23000
Total Purchase in Feb 58900
Answer is 58900 pounds

ekkarill92 answered 2 years ago
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