Soster makes and sells candles. Each candle uses 0.6 kilograms of wax. Budgeted production of candles in
Question:
Soster makes and sells candles. Each candle uses 0.6 kilograms of wax. Budgeted production of candles in units for the next five months is as follows:
| March | April | May | June | July |
Budgeted Production | 20,000 | 17,000 | 18,000 | 15,000 | 16,000 |
The company wants to maintain monthly ending inventories of wax equal to 25% of the following month's budgeted production needs. There were 1,300 kilograms of wax on hand on March 31 and 900 kilograms at March 1. The cost of wax is $0.75 per kilogram. Soster pays 45% of merchandise purchases in the month purchased and 55% in the following month.
Instructions:
a. Prepare a direct materials purchases budget for the April.
b. Determine how much cash will be paid for purchases during April?
Fundamental Accounting Principles
ISBN: 978-0078110870
20th Edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta