1 | Total required production in units | = | $ 7,31,910 | ||
2 | Total estimated cost | = | $ 45,21,000 | ||
1 | Inventory Purchases Budget | ||||
July | August | September | October | ||
A | Unit Sales | $ 2,20,000 | $ 2,33,200 | $ 2,47,192 | $ 2,62,024 |
B | Add: Desired ending inventory (Next quaterSales X 75%) | $ 1,74,900 | $ 1,85,394 | $ 1,96,518 | |
C | Total inventory needed (A + B) | $ 3,94,900 | $ 4,18,594 | $ 4,43,710 | |
D | Less: Beginning Inventory | $ 1,65,000 | $ 1,74,900 | $ 1,85,394 | |
E | Unit Production(C - D) | $ 2,29,900 | $ 2,43,694 | $ 2,58,316 | |
Workings: | |||||
July | = | $ 2,29,900 | |||
August | = | $ 2,43,694 | |||
September | = | $ 2,58,316 | |||
Production in units | = | $ 7,31,910 | |||
2 | Material consumed during the year | = | Units produced X Material consumption | ||
= | 700000 X 4 | ||||
= | 2800000 | ||||
Desired ending inventory | = | 2800000 X 25% | |||
= | 700000 | ||||
Material consumed during the year | = | 2800000 | |||
Add:Desired ending inventory | = | 700000 | |||
Less: Beginning Inventory | = | 760000 | |||
(i) | Raw material purchased | = | 2740000 | ||
(ii) | Cost of raw material per pond | = | $ 1.65 | ||
(i) X (ii) | Total estimated cost | = | $ 45,21,000 |
Greener Grass Fertilizer Company plans to sell 220,000 units of finished product in July and anticipates...
Greener Grass Fertilizer Company plans to sell 220,000 units of finished product in July and anticipates a growth rate in sales of 5 percent per month. The desired monthly ending inventory in units of finished product is 75 percent of the next month's estimated sales. There are 165,000 finished units in inventory on June 30. Each unit of finished product requires 3 pounds of raw material at a cost of $2.15 per pound. There are 730,000 pounds of raw material...
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Greener Grass Fertilizer Company plans to sell 220,000 units of finished product in July and anticipates a growth rate in sales of 5 percent per month. The desired monthly ending inventory in units of finished product is 90 percent of the next month's estimated sales. There are 198,000 finished units in inventory on June 30. Each unit of finished product requires 5 pounds of raw material at a cost of $2.05 per pound. There are 740,000 pounds of raw material...
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San Fernando Fertilizer Company plans to sell 230,000 units of finished product in July and anticipates a growth rate in sales of 5 percent per month. The desired monthly ending inventory in units of finished product is 75 percent of the next month's estimated sales. There are 172,500 finished units in inventory on June 30. Each unit of finished product requires 6 pounds of raw material at a cost of $1.35 per pound. There are 740,000 pounds of raw material...