Question

Madrid Inc. has the following budgeted production in units for the next four months: Units Month...

Madrid Inc. has the following budgeted production in units for the next four months: Units Month Produced June 90,000 July 120,000 August 210,000 September 150,000 Two pounds of raw materials are required for each unit produced. Ending raw materials inventory should equal 30% of next month’s production needs. Raw materials inventory on June 1st was 54,000 pounds. Madrid's total required raw material purchases in pounds for July are: Group of answer choices are

240,000

158,000

366,000

294,000

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Solution

Madrid Inc

Determination of total required raw material purchases in pounds for July:

July

August

Budgeted production in units

120,000

210,000

raw materials per unit

2 pounds

2 pounds

budgeted production, pounds

240,000

420,000

add: ending inventory

30% x 420,000 = 126,000

raw material needs

366,000 pounds

less: beginning inventory

72,000

raw materials needed for production

294,000 pounds

Hence, raw material purchases in pounds for July = 294,000

Note – beginning inventory for July = 120,000 units x 2 pounds x 30% = 72,000

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Lubriderm Corporation has the following budgeted unit sales for the next six-month period: Month Unit Sales...
Lubriderm Corporation has the following budgeted unit sales for the next six-month period: Month Unit Sales June 130,000 July 100,000 August 160,000 September 200,000 October 140,000 November 180,000 There were 26,000 units of finished goods in inventory at the beginning of June. Plans are to have an inventory of finished products that equal 20% of the unit sales for the next month. Five pounds of materials are required for each unit produced. Each pound of material costs $20. Raw material...
Croy Inc. has the following projected sales for the next five months: Month Sales in Units...
Croy Inc. has the following projected sales for the next five months: Month Sales in Units April 3,590 May 3,800 June 4,560 July 4,145 August 3,950 Croy’s finished goods inventory policy is to have 60 percent of the next month’s sales on hand at the end of each month. Direct material costs $2.60 per pound, and each unit requires 2 pounds. Raw materials inventory policy is to have 50 percent of the next month’s production needs on hand at the...
Croy Inc. has the following projected sales for the next five months:    Month Sales in Units...
Croy Inc. has the following projected sales for the next five months:    Month Sales in Units April 3,560 May 3,905 June 4,510 July 4,155 August 3,900 Croy’s finished goods inventory policy is to have 60 percent of the next month’s sales on hand at the end of each month. Direct material costs $2.70 per pound, and each unit requires 2 pounds. Raw materials inventory policy is to have 50 percent of the next month’s production needs on hand at the...
Croy Inc. has the following projected sales for the next five months: Month Sales in Units...
Croy Inc. has the following projected sales for the next five months: Month Sales in Units April 3,600 May 3,810 June 4,570 July 4,170 August 4,000 Croy’s finished goods inventory policy is to have 70 percent of the next month’s sales on hand at the end of each month. Direct material costs $2.90 per pound, and each unit requires 2 pounds. Raw materials inventory policy is to have 50 percent of the next month’s production needs on hand at the...
Osage, Inc., has actual sales for May and June and forecast sales for July, August, September,...
Osage, Inc., has actual sales for May and June and forecast sales for July, August, September, and October as follows: Actual: May 5,930 units June 6,240 units Forecast: July 5,910 units August 6,890 units September 5,630 units October 5,210 units Required: a. The firm’s policy is to have finished goods inventory on hand at the end of the month that is equal to 70% of the next month’s sales. It is currently estimated that there will be 4,137 units on...
Croy Inc. has the following projected sales for the next five months: Month Sales in Units...
Croy Inc. has the following projected sales for the next five months: Month Sales in Units April 3,580 May 3,890 June 4,540 July 4,110 August 3,990 Croy’s finished goods inventory policy is to have 50 percent of the next month’s sales on hand at the end of each month. Direct materials costs $2.70 per pound, and each unit requires 2 pounds. Direct materials inventory policy is to have 50 percent of the next month’s production needs on hand at the...
Croy Inc. has the following projected sales for the next five months: Month Sales in Units...
Croy Inc. has the following projected sales for the next five months: Month Sales in Units April 3,430 May 3,840 June 4,550 July 4,105 August 3,950 Croy’s finished goods inventory policy is to have 50 percent of the next month’s sales on hand at the end of each month. Direct materials costs $3.20 per pound, and each unit requires 2 pounds. Direct materials inventory policy is to have 50 percent of the next month’s production needs on hand at the...
Zira Co. reports the following production budget for the next four months. April May June July...
Zira Co. reports the following production budget for the next four months. April May June July Production (units) 594 635 627 607 Each finished unit requires five pounds of raw materials and the company wants to end each month with raw materials inventory equal to 30% of next month’s production needs. Beginning raw materials inventory for April was 891 pounds. Assume direct materials cost $3 per pound. Prepare a direct materials budget for April, May, and June. (Round your intermediate...
Zira Co. reports the following production budget for the next four months. April May June July...
Zira Co. reports the following production budget for the next four months. April May June July Production (units) 706 760 738 718 Each finished unit requires four pounds of raw materials and the company wants to end each month with raw materials inventory equal to 40% of next month’s production needs. Beginning raw materials inventory for April was 1,130 pounds. Assume direct materials cost $5 per pound. Prepare a direct materials budget for April, May, and June. (Round your intermediate...
Zira Co. reports the following production budget for the next four months. April May June July...
Zira Co. reports the following production budget for the next four months. April May June July Production (units) 672 700 706 686 Each finished unit requires five pounds of raw materials and the company wants to end each month with raw materials inventory equal to 30% of next month’s production needs. Beginning raw materials inventory for April was 1,008 pounds. Assume direct materials cost $6 per pound. Prepare a direct materials budget for April, May, and June. (Round your intermediate...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT