Ask Question
17 June, 18:35

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.

+4
Answers (1)
  1. 17 June, 19:41
    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?
Get 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 there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers