On January 1, Bandy Corp. plans to introduce a new product (i.e., no beginning inventory) called Handy
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Question:
On January 1, Bandy Corp. plans to introduce a new product (i.e., no beginning inventory) called Handy Dandy. Management estimates sales of 35,000 units, 28,000 units, and 40,000 units for January, February, and March,
respectively. The planned selling price is $25.00.
Each unit of Handy Dandy requires 2 pounds of direct material and 1 hour of direct labor. Management wants to end each month with a Handy Dandy inventory equal to 10% of the next month's sales, and a direct material inventory equal to 5% of the next month's production.
Refer to the above.Given that Bandy plans to have no inventory of direct materials on January 1, how many pounds of direct material do they plan to purchase in January?
Expert Answer:
To calculate the pounds of direct material Bandy Corp plans to purchase in January we need to consid... View the full answer
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