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
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?
Step by Step Solution
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Step: 1
a Prepare a direct materials purchases budget for the Apri...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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