Question
In: Accounting
The following are budgeted data: Sales (units )Production (units) April 15,000 18,000 May 20,000 19,000 June...
The following are budgeted data:
Sales (units )Production (units)
April 15,000 18,000
May 20,000 19,000
June 18,000 16,000
Two pounds of material are required for each finished unit. The inventory of materials at the end of each month should equal 20% of the following month's production needs.
Purchases of raw materials for May should be:
36,800 pounds
39,200 pounds
52,000 pounds
38,000 pounds
Solutions
Expert Solution
Answer : 36800 pounds
=>
| Material used in May | 19000*2pounds | 38000 pounds |
| + Closing bal of Material required | (16000*2)*20% | +6400 |
| - Opening bal of Material available i.e April's closing balance of Material | (19000*2)*20% | -7600 |
| Purchases of raw materials for May = | 36800 pounds |
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