Begna Chemicals has projected sales of its product for the next year on a quarterly basis as
Question:
Begna Chemicals has projected sales of its product for the next year on a quarterly basis as follows:
Quarter
Sales (units)
1st
600
2nd
900
3rd
1200
4th
720
The finished product requires 4 liters of raw material and 8 hours of direct labor. Begna tries to maintain a Finished Goods ending inventory equal to one-third ofthe next month sales and a Raw Material ending inventory equal to one-half of the current month's production needs. At the beginning of the first quarter, there were 200 units and 350 liters of finished goods and raw materials inventory respectively.
a.What is the production requirement of the 2nd quarter?
b.What is the quantity of direct materials to be purchased in the 2nd quarter?
Cost Accounting Foundations and Evolutions
ISBN: 978-1111626822
8th Edition
Authors: Michael R. Kinney, Cecily A. Raiborn