Question
Company A makes and sells a single product, Product R. Three yards of material K are needed to make one unit of product R. Budgeted
Company A makes and sells a single product, Product R. Three yards of material K are needed to make one unit of product R. Budgeted production of product R for the next five months is:
Aug 14,000 units
Sept 14,500 units
Oct 15,500 units
Nov 12,600 units
Dec 11,900 units
The company wants to maintain monthly ending inventories of Material K equal to 20% of the following month's production needs for sales. On july 31, this requirement was not met since only 2,500 yards of material K were on hand. The cost of Material k is $0.85 per year. The company wants to prepare a Direct Materials purchase budget for the rest of the year.
- The total cost of material K to be purchased in August is:
- The total needs of yards of material K for the month of November is?
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