Croy Incorporated has the following projected sales for the next five months: Sales in Units 3,470 3,870 4,600 4,155 3,990 Month April May June July August 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 cost $3.10 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 end of each month. Direct materials on hand at March 31 totaled 3,670 pounds. Required: 1. Determine budgeted production for April, May, and June, 2. Determine budgeted cost of direct materials purchased for April and May.
Croy Incorporated has the following projected sales for the next five months: Sales in Units 3,470 3,870 4,600 4,155 3,990 Month April May June July August 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 cost $3.10 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 end of each month. Direct materials on hand at March 31 totaled 3,670 pounds. Required: 1. Determine budgeted production for April, May, and June, 2. Determine budgeted cost of direct materials purchased for April and May.
Chapter15: Managing Short-term Assets
Section: Chapter Questions
Problem 1PROB
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