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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