Question

Croy Inc. has the following projected sales for the next five months:
Month ...... Sales in Units
April ....... 3,850
May ....... 3,875
June ....... 4,260
July ....... 4,135
August ....... 3,590

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 $3.10 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 3,865 pounds.

Required:
1. Prepare a production budget for April, May, and June.
2. Prepare a Raw Materials purchases budget for April and May.



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  • CreatedFebruary 27, 2015
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