Question

Exercise 9-7

Rensing Ltd. estimates sales for the second quarter of 2020 will be as follows.

Month		Units
April		2,590
May		2,420
June		2,350

The target ending inventory of finished products is as follows.

March 31		2,030
April 30		2,200
May 31		2,150
June 30		2,390

2 units of material are required for each unit of finished product. Production for July is estimated at 2,630 units to start building inventory for the fall sales period. Rensing’s policy is to have an inventory of raw materials at the end of each month equal to 70% of the following month’s production requirements.

Raw materials are expected to cost $5 per unit throughout the period.

Calculate the May raw materials purchases in dollars.

Raw material purchases cost

$ ?

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Answer 1