Key Co. manufactures beanies. The budgeted units to be produced and sold are below: August September...

 

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Key Co. manufactures beanies. The budgeted units to be produced and sold are below: August September Expected Production 6,500 7,000 Expected Sales 6,200 7,100 It takes 5 metres of yarn to produce a beanie. The company's policy is to maintain yarn at the end of each month equal to 25% of the next month's production needs and to maintain a finished goods inventory at the end of each month equal to 30% of next month's anticipated production needs. The cost of yarn is $0.75 a metre. On August 1, 4,250 metres of yarn were on hand. Prepare materials purchases budget for August. Key Co. manufactures beanies. The budgeted units to be produced and sold are below: August September Expected Production 6,500 7,000 Expected Sales 6,200 7,100 It takes 5 metres of yarn to produce a beanie. The company's policy is to maintain yarn at the end of each month equal to 25% of the next month's production needs and to maintain a finished goods inventory at the end of each month equal to 30% of next month's anticipated production needs. The cost of yarn is $0.75 a metre. On August 1, 4,250 metres of yarn were on hand. Prepare materials purchases budget for August.

Answer rating: 100% (QA)

To prepare the materials purchases budget for August we need to calculate the total yards of yarn ne... View the full answer