Rensing Ltd. estimates sales for the second quarter of 2017 will be as follows.
ID: 2521065 • Letter: R
Question
Rensing Ltd. estimates sales for the second quarter of 2017 will be as follows.
Month Units
April 2,520
May 2,440
June 2,390
The target ending inventory of finished products is as follows.
March 31 2,010
April 30 2,280
May 31 2,170
June 30 2,330
2 units of material are required for each unit of finished product. Production for July is estimated at 2,750 units to start building inventory for the fall sales period. Rensing’s policy is to have an inventory of raw materials at the end of each month equal to 50% of the following month’s production requirements.
Raw materials are expected to cost $7 per unit throughout the period.
Calculate the May raw materials purchases in dollars.
Raw material purchases cost $ 34610 IS WRONG..
Can someone help please don't understand this problem
i have also gotten for answers that were wrong:
34610
34153
32620 x2
i only have 1 more chance left
Explanation / Answer
PRODUCTION BUDGET APRIL MAY JUNE Budgeted Sales Units 2,520 2,440 2,390 Add: Desired Ending Finished inventory 2,280 2,170 2,330 Total Needs 4,800 4,610 4,720 Less: Beginning Finished Inventory 2,010 2,280 2,170 Required Production in units 2,790 2,330 2,550 RAW MATERIAL PURCHASE BUDGET APRIL MAY JUNE Budgeted Production units 2,790 2,330 2,550 Raw mterial required 2 2 2 Raw material total prod. Needs 5,580 4,660 5,100 Add: Desired Ending Inventory 2,330 2,550 Total needs 7,910 7,210 Less: Beginning Inventory 2,790 2,330 Purchase Units 5,120 4,880 Cost price per unit 7.00 7.00 Budgeted Purchase in $ 35,840 34,160 Raw material Purchase budget for May is $ 34,160