Question

Croy Inc. has the following projected sales for the next five months: Month April May June July August Sales in Units 3,590 3,845 4.580 4,125 3,910 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 end of each month. Raw materials on hand at March 31 totaled 3,743 pounds. Required: 1. Determine budgeted production for April, May, and June. (Do not round your intermediate calculations and round your final answer to the nearest whole number.) April May June Budgeted Production (Units) 2. Determine the budgeted cost of materials purchased for April, May, and June (Use rounded Budgeted Production units in intermediate calculations. Round your answers to 2 decimal places.) April May June Budgeted Cost of Material Purchased

Answer 1

Solutions:

E F G Н 2 3 4 5 Croy Inc Production Budget 6 7 April 3590 July 4125 May 3845 June Sales Units Add: Desired Ending Inventory (60% of next 8 4580 9 month's sales uni ts) Less: Beginning Inventory 2748 2475 2346 2307 2748 2475 2307 10 2154 11 3996 Budgeted Production units 12 3743 4286 4307 13 14 15 Croy Inc. Direct Material Budget 16 17 Аpril 3743 May 4286 June Budgeted Production Uni ts Material Requirement per unit Materials Needed for Production Add: Desired Ending Material Inventory (50% 18 4307 19 2 2 2 7486 8614 20 8572 21 of next month's production needs) 22 4307 3996 4286 Total Material Requirement Less: Desired Beginning material inventory Materials to be Purchased Direct Material Cost per Pound Total Budgeted Direct Material Cost 12610 11772 12879 4286 23 3743 4307 8029 24 8593 8303 $2.60 $22,342 $2.60 $20,875 $2.60 25 $21,588 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 Sheet60 (3) et 705 Sheet221 (2) Sheet884 Sheet733 II