Jake Corporation makes a product that is very popular in the summer. Thus sales peak in June each year leading to higher production levels in April and May as shown below:

APRIL MAY JUNE TOTAL

Direct Materials Budget 60,000 70,000 40,000 170,000

Each unit needs two springs. The springs can be difficult to get at times, so the company has determined that it must have 20% of the required springs at the start of each period. The Company had 24,000 springs in inventory at the beginning of April. Jake has determined it needs 18,000 springs at the end of June.

1) How many gages are needed to be purchased to meet the production schedule for the quarter?

a) 170,000 c) 340,000 b) 334,000 d) 364,000

2) If the Springs cost $1.50 each and Jake pays for half of the springs in the month they were purchased and half in the following month, how much did they pay for the springs during the months of April and June. Accounts Payable at the beginning of April was $80,000 all of which was paid in April. EXTRA CREDIT: What is Accounts Payable at the end of June?