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Langford Beverage Company has budgeted sales of 250,000 cans of lemonade mix for the month of January 20X1 and 400,000 cans for February 20X1. Production
Langford Beverage Company has budgeted sales of 250,000 cans of lemonade mix for the month of January 20X1 and 400,000 cans for February 20X1. Production of the mix requires 14 ounces of flavoring and 2 ounces of sugar per can. The beginning inventories, in units, at January 20X 1 are provided below. The company wants to carry a finished goods inventory of 5% of the next month's sales in cans, and direct materials inventory for both materials in sufficient quantity to produce 25,000 cans of product. REQUIRED: (1) (2) (3) Calculate the number of cans of lemonade mix that must be produced in January to meet the estimated sales and inventory requirements. Calculate the amount of flavoring, in ounces (rounded to the next whole ounce) that must be purchased in January to meet production and inventory requirements. Calculate the amount of sugar, in pounds (rounded to the next whole pound) that must be purchased in January to meet production and inventory requirements. If flavoring costs $2.50 per pound and sugar costs $0.25 per pound, what is the total amount of purchases, in dollars (rounded to the nearest whole dollar), that the company must make for flavoring and sugar during the month of January? (4) LANGFORD BEVERAGE COMPANY LIST OF BEGINNING INVENTORIES AT JANUARY 20X1 Finished Goods Inventory: Lemonade Mix Direct Materials Inventory: Flavoring Sugar 5,000 cans 2,500 pounds 700 pounds
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