Question

Croy Inc. has the following projected sales for the next five months Month April May Sales in Units 3,560 3,825 4,630 4, 185 3,900 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 costs $3.20 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 3,693 pounds Required: 1. Determine budgeted production for April, May, and June 2. Determine budgeted cost of materials purchased for April and May Complete this question by entering your answers in the tabs below Required 1 Required 2 Determine budgeted production for April, May, and June. (Do not round your intermediate calculations and round your final answers to the nearest whole number.) April May June Budgeted Production (Units) Rete Required 2 >

Answer 1

Statement Showing Production Budget
	Apr	May	Jun	Jul
Sales (a)	3560	3825	4630	4185
Desired Ending inventory (b) ( 50% of Next Month sales)	1912.5	2315	2092.5	1950
Total Unit Needed (c=a+b)	5472.5	6140	6722.5	6135
Less: Beg. Inventory (d)	1780	1912.5	2315	2092.5
Production required (c-d)	3,693	4,228	4,408	4042.5

Statement showing Computation of Material Purchased
	Apr	May	June
Production Required (a)	3693	4228	4408
Material require / Unit (b)	2	2	2
RM Required for Production (c=axb)	7385	8455	8815
Desired Ending inventory (d) ( 50% of Next month Required)	4227.5	4407.5
Total Raw material needed (e=c+d)	11612.5	12862.5
Beg. RM Inventory (f)	3692.5	4227.5
RM be purchased (g=e-f)	7920	8635
Price/Pound (h)	$3.69	$3.69
Cost of Purchase (gXh)	$29,249	$31,889