Ask Question
9 December, 21:17

Cahuilla Corporation predicts the following sales in units for the coming four months: April May June July Sales in Units 370 410 430 370 Each month's ending finished goods inventory should be 30% of the next month's sales. March 31 finished goods inventory is 111 units. A finished unit requires 5 pounds of direct material B at a cost of $3.00 per pound. The March 31 Raw Materials Inventory has 220 pounds of B. Each month's ending Raw Materials Inventory should be 20% of the following month's production needs. The budgeted production for May is: Multiple Choice 360 units. 287 units. 539 units. 410 units. 416 units.

+2
Answers (1)
  1. 9 December, 23:35
    0
    The budgeted production for May is 416 units

    Explanation:

    For computing the budgeted production the following equation is to be applied which is shown below:

    = may sales units + closing inventory - opening inventory

    where,

    may sales units = 410 units

    closing inventory is 30% of next month sales which means 30% of june which comes to be 30% * 430 = 129

    and for opening inventory the same ratio is applied i. e. 30% of current month sales which equals to 30% * 410 = 123

    Now, apply these values to the above equation

    = may sales units + closing inventory - opening inventory

    = 410 + 129 - 123

    = 416 units.

    Thus, The budgeted production for May is 416 units
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Cahuilla Corporation predicts the following sales in units for the coming four months: April May June July Sales in Units 370 410 430 370 ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers