Question
In the preparation of the sales budget for the next three-month period, the Rouse Company determined that 41,000 finished units would be needed to fulfill
In the preparation of the sales budget for the next three-month period, the Rouse Company determined that 41,000 finished units would be needed to fulfill sales obligations. The company has an inventory of 12,000 units of finished goods on hand at December 31 and has a target finished goods inventory of 14,000 units at the end of the succeeding quarter. It takes two litres of direct materials to make one unit of finished product. The company has an inventory of 65,000 litres of direct materials at December 31 and has a target ending inventory of 55,000 litres.
QUESTION: How many litres of direct materials should be ordered for delivery during the three months ending March 31?
Requirement-Fill out the table below in the blanks with the following along with their amounts:
Beginning Inventory, Budgeted Unit Sales, Litres to be used in production, Target Ending Inventory, Total Required Litres, Units of finished goods to be produced.
_________ | __________ | ||
x | _________ | x | __________ |
_________ | __________ | ||
+ | _________ | + | __________ |
_________ | __________ | ||
- | _________ | - | __________ |
Purchases to be made (in litres) | = | __________ |
Thank you.
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