Question 1: Balmforth Products Inc

Balmforth Products, Inc. makes and sells a single product called a Bik. It takes three yards of Material A to make one Bik. Budgeted production of Biks for the next five months is as follows: February March April May June 14,500 units 11,900 units 14,000 units 15,500 units 12,600 units The company wants to maintain monthly ending inventories of Material A equal to 20% of the following month's production needs. On January 31, this target had not been attained since only 2,000 yards of Material A were on hand. The cost of Material A is $0.80 per yard. The company wants to prepare a Direct Materials Purchases Budget. 40. The total cost of Material A to be purchased in February is: A) $49,792 B) $47,492 C) $44,032 D) $38,912 41. The desired ending inventory of Material A for the month of March is: A) 9,300 yards. B) 7,140 yards. C) 3,100 yards. D) 8,400 yards. 42. The total needs (i.e., production requirements plus desired ending inventory) of Material A for the month of May are: A) 46,500 yards. B) 54,060 yards. C) 55,200 yards. D) 47,640 yards