Question

Croy Inc. has the following projected sales for the next five months: Month April May Sales in Units 3,560 3,920 4,560 4,140 3,940 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 $3.10 per pound, and each unit requires 2 pounds. Direct materials inventory policy is to have 50 percent of the ne month's production needs on hand at the end of each month. Direct materials on hand at March 31 totaled 3,740 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) Required 2 >

Answer 1

A В C E 23 Answer 24 Budgeted production in units: July August 4,140 3,940 2,070 May April 3,560 June 25 26 Sales 3,920 4,560 27 Add: Ending inventory 28 Less: Beginning inventory 29 Budgeted production 1,960 2,280 1,970 1,780 3,740 1,960 2,280 2,070 4,240 4,350 4,040 30 31 Budgeted cost of material purchased: Аpril Мay June July 32 33 Material consumed (Production units x 2 pounds) 7,480 8,480 4,350 8,700 8,080 4,040 34 Add: Ending inventory of direct material 35 Less: Beginning inventory of direct material 36 Material purchase during the month 37 Cost per pound 4,240 3,740 4,240 4,350 8,590 $ 3.10 $ 24,738 $26,629 26,009 7,980 8,390 $ 3.10 $ 3.10 38 Budgeted cost of material purchase

Workings:

A. C Е F 23 Answer 24 Budgeted production in units: July 4140 - F26*50% -E26* 50% August 3940 April 3560 -C26* 50% -B26*50% Мay 3920 -D26*50% -C26* 50% June 25 4560 -E26*50% -D26* 50% -B26+B27-B28C26+C27-C28 D26+D27-D28=E26+E27-E28 26 Sales 27 Add: Ending inventory 28 Less: Beginning inventory 29 Budgeted production 30 31 Budgeted cost of material purchased: July -E29*2 April 33 Material consumed (Production units x 2 pounds) B29*2 ЕС33*50% 3740 May -C29*2 =D33* 50% ЕС33*50% =B33+B34-B35 C33+C34-C35D33+D34-D35 3.1 -C36 C37 June 32 -D29*2 -E33* 50% -D33* 50% 34 Add: Ending inventory of direct material 35 Less: Beginning inventory of direct material 36 Material purchase during the month 37 Cost per pound 3.1 -B36*B37 3.1 =D36*D37 38 Budgeted cost of material purchase