Question
RyRy, Inc. manufactures dance apparel. Unit sales projections for the first five months of the upcoming year are as follows: Month Unit Sales January 3,500
RyRy, Inc. manufactures dance apparel. Unit sales projections for the first five months of the upcoming year are as follows:
Month | Unit Sales |
January | 3,500 |
February | 3,800 |
March | 3,300 |
April | 5,000 |
May | 5,000 |
Beginning finished goods inventory consisted of 850 units. The desired inventory of units at the end of each month in the upcoming year should equal 25% of the following months budgeted unit sales. Each unit requires 4 yards of fabric. The company wants to have 20% of the fabric required for the next months expected production on hand at the end of each month. This inventory requirement was met at the end of the previous year. The fabric costs $0.20 per yard.
1) What is the expected dollar amount of raw material purchases for the first quarter of the upcoming year?
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