Question

HW Score: 30%, 6.3-40 Question H Nantucket Industries manufactures and sells two models of watches, Prime and Lucuria. It expects to soll 4,000 units of Prime and 1.100 units of Luxuria in 2019. The following estimates are given for 2019: Prime Selling price Direct materials Direct labor Manufacturing Overhead Nantucket had an inventory of 230 units of Prime and 125 units of Luxuria at the end of 2018. It has decided that as a measure to counter stock outages it will maintain ending inventory of 300 units of Prime and 2 units of Luna Each L una watch rogures one unit of Crimpson and has to be imported at a cost of $15. There were 100 units of Crimpson in stock at the end of 2018. The management does not want to have any stock of Crimpson the end of 2019 O A $16.500 OB. $17.775 OC 501.950 OD $16,275 Click to select your answer and then click check Answer Check Art All parts showing BO

Answer 1

Calculation of the amount budgeted for purchase of Crimpson in 2019.
Particulars Quantity
Expected Sales of Luxuria 1,100
Add : Req. Closing Inventory of Luxuria 210
Less: Opening Inventory of Luxuria   (125)
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Production of Luxuria 1,185

Therefore number of Crimpson required for production of Luxuria in 2019 is 1,185, since the one units of Crimpson is required for each luxuria watch unit.

Number of Crimpson required 1,185
Add : Req. Closing Inventory of Crimpson 0
Less: Opening Inventory of Crimpson (100)
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Net required Crimpson Units 1,085

Therefore amount budgeted for Crimpson = 1,085 Units * $ 15 = $ 16,275.