Question
Coles Company makes and sells a single product, Product ABC. Three yards of Material XYZ are needed to make one unit of Product ABC. Budgeted
Coles Company makes and sells a single product, Product ABC. Three yards of Material XYZ are needed to make one unit of Product ABC. Budgeted production of Product ABC for the next five months is as follows: August 14,000 units September 14,500 units October 15,500 units November 12,600 units December 11,900 units The company tries to maintain monthly ending inventories of Material XYZ equal to 20% of the following months production needs. On July 31, 2,500 yards of Material XYZ were on hand. The cost of Material XYZ is $0.85 per yard. The total cost of Material XYZ to be purchased in AUGUST is: a. $40,970 b. $48,200 c. $33,840 d. None of the above 29. Erie, Inc. has budgeted sales in units for the next five months as follows: June 4,600 units July 7,200 units August 5,400 units September 6,800 units October 3,800 units Past experience has shown that the ending inventory for each month needs to be equal to 10% of the next months sales in units. The inventory on May 31 is budgeted to be 460 units. The company wants to prepare a Production Budget. The budgeted total number of units to be produced in JULY is: a. 7,020 units b. 7,200 units c. 7,740 units d. None of the above
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