Question
The following information applies to questions 46 to 49 The following information (in units of finished goods) was obtained from Kiuy Limited's production budget: July
The following information applies to questions 46 to 49
The following information (in units of finished goods) was obtained from Kiuy Limited's production budget:
July | August | September | |
Closing inventory | 840 | 900 | 1,100 |
Production | 1,800 | 2,100 | 3,200 |
Each unit requires 20 metres of fabric, which costs $37 per metre.
Raw materials inventory at the end of each month should be 73% of the following month's production requirements. 30% of the cost of raw materials purchases is paid in the month of purchase and the remainder is paid in the following month. At the beginning of July, the raw materials inventory is expected to be 7,000 metres.
Prepare a raw materials budget and use it to answer questions 46 to 49.
Question 46 (1 mark):
Calculate the quantity of fabric, in metres, required for production in July.
Question 47 (1 mark):
Calculate the quantity of fabric, in metres, required for production in August.
Calculate the closing raw materials inventory, in metres, for July.
Calculate the required purchases of raw materials inventory, in metres, for July.
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