Niagra Chemical Company produces three products using three different continuous processes The products are Yarex, Darol, and Norex Projected sales in gallons for the three products for the years 20x2 and 20x3 are as follows 20x2 20x3 Yarex 120,000 130,000 Darol 80,000 70,000 Norex 50,000 60,000 Because of the continuous nature of Niagras processes, work in process inventory for each of the products remains constant throughout the year Inventories are planned for each product so that the projected finished goods inventory at the beginning of each year is equal to 8 percent of that years projected sales The conversion requirements in hours per gallon for the three products are Yarex, 0 07 hours Darol, 0 10 hours and Norex, 0 16 hours The conversion cost of $20 per hour is considered 100 percent variable The raw material requirements of the three products are shown in the following chart Raw Material Units Unit Price Yarex Darol Norex Gamma pounds $ 8 0 2 0 4 Murad pounds 6 0 4 0 5 Islin gallons 5 1 0 0 7 0 5 Tarden gallons 10 0 3 0 5 Raw material inventories are planned so that each raw materials projected inventory at the beginning of a year is equal to 10 percent of the previous years usage of that raw material 1) Determine niagra chemical companys production budget in gallos for the three products for 20x2 Yarex Darol Norex 2) Determine Niagra Chemical companys conversion cost budget for 20x2 3) Assuming the 20x1 usage of inlin is 200,000 gallons, determine the companys raw material purchases budget in dollars for Islin for 20x2 4) Assume that for 20x2 production, Niagra Chemical Company could replace the raw material Islin with the raw material Philin The usage of Philin would be the same as the usage of Islin However, Philin would cost 20 percent more than Islin and would cut production times on all three products by 10 percent Compare cost of using Philin over using Islin In cost of raw material in conversion cost in production cost

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Niagra Chemical Company produces three products using three different continuous processes. The products are Yarex, Darol, and Norex. Projected sales in gallons for the three

Niagra Chemical Company produces three products using three different continuous processes. The products are Yarex, Darol, and Norex. Projected sales in gallons for the three products for the years 20x2 and 20x3 are as follows:

	20x2	20x3
Yarex	120,000	130,000
Darol	80,000	70,000
Norex	50,000	60,000

	Because of the continuous nature of Niagras processes, work-in-process inventory for each of the products remains constant throughout the year.
	Inventories are planned for each product so that the projected finished-goods inventory at the beginning of each year is equal to 8 percent of that years projected sales.
	The conversion requirements in hours per gallon for the three products are Yarex, 0.07 hours; Darol, 0.10 hours; and Norex, 0.16 hours. The conversion cost of $20 per hour is considered 100 percent variable.
	The raw-material requirements of the three products are shown in the following chart.

Raw Material	Units	Unit Price		Yarex	Darol	Norex
Gamma	pounds	$	8	0.2	0.4
Murad	pounds		6	0.4		0.5
Islin	gallons		5	1.0	0.7	0.5
Tarden	gallons		10		0.3	0.5

Raw-material inventories are planned so that each raw materials projected inventory at the beginning of a year is equal to 10 percent of the previous years usage of that raw material.

1) Determine niagra chemical companys production budget in gallos for the three products for 20x2.

Yarex _____ Darol _________ Norex __________

2) Determine Niagra Chemical companys conversion cost budget for 20x2.

3) Assuming the 20x1 usage of inlin is 200,000 gallons, determine the companys raw material purchases budget in dollars for Islin for 20x2.

Assume that for 20x2 production, Niagra Chemical Company could replace the raw material Islin with the raw material Philin. The usage of Philin would be the same as the usage of Islin. However, Philin would cost 20 percent more than Islin and would cut production times on all three products by 10 percent. Compare cost of using Philin over using Islin.

____ In cost of raw material _____

____ in conversion cost ______

_____ in production cost ____