Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Textbook Question
Chapter 9, Problem 9.7E
Rensing Ltd. estimates sales for the second quarter of 2017 will be as follows.
Month | Units |
April | 2,550 |
May | 2,675 |
June | 2,390 |
The target ending inventory of finished products is as follows.
March 31 | 2,000 |
April 30 | 2,230 |
May 31 | 2,200 |
June 30 | 2,310 |
Two units of material are required for each unit of finished product. Production for July is estimated at 2,700 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 50% of the following month’s production requirements.
Raw materials are expected to cost $4 per unit throughout the period.
Instructions
Calculate the May raw materials purchases in dollars.
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Chapter 9 Solutions
Managerial Accounting: Tools for Business Decision Making
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