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David Corporation has two departments, a merchandise department and a production department. The following information concerns operations for the last quarter of 2019, the four
David Corporation has two departments, a merchandise department and a production department. The following information concerns operations for the last quarter of 2019, the four quarters of 2020, and the first quarter of 2021. The selling price of the product from the Production Department is US$20 per unit. The Required Production in units for the four quarters of 2020 are as follows: 2020 Quarter 2 1 3 4 Required Production 9,750 5,350 6,350 5,600 Sales are collected in the following pattern: 60% in the quarter the sales are made, and the remaining 40% in the following quarter. On January 1, 2020, the company balance sheet showed $80,000 in accounts receivable, all of which will be collected in the first quarter of the year. Bad debts are negligible and can be ignored. Five pounds (5lbs) of raw materials are required to complete one unit of the product. The company requires ending raw materials inventory at the end of each quarter equal to 30% of the following quarter's production needs. The production needs for the first quarter of 2021 are 16,500 pounds. On December 31, 2019, the company had 10,000 pounds of raw materials on hand. What are the raw materials to be purchased in pounds for the third and fourth quarters
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