Question

Your answer is incorrect. Try again. Rensing Ltd. estimates sales for the second quarter of 2017 will be as follows Month April May June Units 2,520 2.460 2,360 The target ending Inventory of finished products March 31 April 30 May 31 June 30 2,050 2,230 2,100 2.300 2 units of material are required for each unit of finished product Production for July is estimated at 2,690 units to start building inventory for the fall sales period. Rensing's policy is to have an Inventory of raw materials at the end of each month equal to 50% of the following month's production requirements. Raw materials are expected to cost $6 per unit throughout the period. Calculate the May raw materials purchases in dollars. Raw material purchases cost 28650 VIDEO AND SKILLS

Answer 1

Month	Sales	Opening inventory finished goods	Ending inventory finished goods	Production = Sales - Opening inventory + Closing inventory	Raw material required = Production*2	Desired Ending Raw material inventory
March			2050
April	2520	2050	2230	2700	5400	2330
May	2460	2230	2100	2330	4660	2560
June	2360	2100	2300	2560	5120	2690
July				2690	5380
Raw material purchased for May (units) = Required raw material for production + Desired ending raw material inventory - Beginning inventory of raw material
Raw material purchased for May (units) = 4660 + 2560 - 2330 = 4890 units
Raw material purchased for May ($) = 4890*6 = $29340