Question

Croy Inc. has the following projected sales for the next five months: Month April May Sales in Units 3.558 3.920 4.640 4,165 3,970 July August 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 3.772 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

Requirement 1

Solution

	April	May	June
Budgeted production(units)	3772	4352	4355

Working

	April	May	June	July
Units to be sold	3550	3920	4640	4165
Desired Ending Finished Inventory	2352	2784	2499	2382
Total Units needed	5902	6704	7139	6547
Less : Beginning Finished Inventory	2130	2352	2784	2499
Budgeted production(units)	3772	4352	4355	4048

Requirement 2

	April	May	June
Total budgeted direct materials cost	$ 21,122.40	$ 22,638.20	$ 21,847.80

Working

	April	May	June	July
Budgeted production (units)	3772	4352	4355	4048
Materials requirements per unit	2	2	2	2
Materials needed for production (lbs.)	7544	8704	8710	8096
Budgeted ending inventory (lbs.)	4352	4355	4048
Total materials requirements (lbs.)	11896	13059	12758
Beginning inventory (lbs.)	3772	4352	4355
Materials to be purchased (lbs.)	8124	8707	8403
Cost per lb.	$        2.60	$         2.60	$         2.60
Total budgeted direct materials cost	$ 21,122.40	$ 22,638.20	$ 21,847.80