Question

Cahuilla Corporation predicts the following sales in units for the coming four months: April May June...

Cahuilla Corporation predicts the following sales in units for the coming four months:

April May June July
Sales in Units 390 430 450 390


Each month's ending finished goods inventory should be 30% of the next month's sales. March 31 finished goods inventory is 117 units. A finished unit requires 5 pounds of direct material B at a cost of $3.00 per pound. The March 31 Raw Materials Inventory has 240 pounds of B. Each month's ending Raw Materials Inventory should be 20% of the following month's production needs. The budgeted production for May is:

Multiple Choice

  • 376 units.

  • 301 units.

  • 565 units.

  • 430 units.

  • 436 units

0 0
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Answer #1

Budgeted production for may

= Budgeted sales + Desired ending inventory - Beginning inventory

= 430 + (450*30%) - (430*30%)

= 430 + 135 - 129

= 436 units

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