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Piper Pasta produces pasta. Piper has a policy that its ending inventory of pasta should be 2 0 % of the next month's expected demand.
Piper Pasta produces pasta. Piper has a policy that its ending inventory of pasta should be of the next month's
expected demand. At March Piper has batches of prepared pasta in finished goods inventory. The pasta that
piper produces uses a special organic flour which costs $ per kilogram. The demand schedule for the next four
months is as follows:
Prepare a production budget for April and May. Also show the total for the two months.
Assume that the company estimated its DM needs in May and June to be and of flour,
respectively The company usually pays of any DM purchases in the month of purchase and the
remainder in the following month after purchase. How much would the company show in DM purchases on
its cash budget in June?
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