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

ekkarill92 answered 2 years ago
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