Question

Croy Inc. has the following projected sales for the next five months: Month April May June July August Sales in Units 3,450 3,915 4,560 4,105 3,920 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 material costs $3.40 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 3,683 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

Answer-1)-

CROY INC.
Production Budget
For April, May and June
Particulars	April	May	June	Total
Unit sales (a)	3450	3915	4560	11925
Add:- Desired ending finished goods inventory (b)	3915*50%=1957.5	4560*50%=2280	4105*50%=2052.5	6290
50% of the next month's sales needs
Less:-Opening finished goods inventory (c)	3450*50%= 1725	1957.5	2280	5962.5
Number of units to be produced (d=a+b-c)	3683	4238	4333	12253

2)-

CROY INC.
Direct Materials Budget
For April, May and June
Particulars	April	May	June	Total
Budgeted production (units)	3683	4238	4333	12254
Material requirement per unit	2 pounds	2 pounds	2 pounds	2 pounds
Materials needed for production (lbs.)	7366	8476	8666	24508
Add- Budgeted ending inventory (lbs.)	8476*50%=4238	8666*50%=4333	8026*50%=4013	12584
Total materials requirement (lbs.)	11604	12809	12679	37092
Less- Beginning inventory (lbs.)	3683	4238	4333	12254
Materials to be purchased (lbs.)	7921	8571	8346	24838
Material price per pound	$3.40	$3.40	$3.40	$3.40
Total budgeted direct materials cost $	26931	29141	28376	84449