Cahuilla Corporation predicts the following sales in units for the coming four m
ID: 2558957 • Letter: C
Question
Cahuilla Corporation predicts the following sales in units for the coming four months: April May June July Sales in Units 260 300 320 260 Each month's ending finished goods inventory should be 40% of the next month's sales. March 31 finished goods inventory is 104 units. A finished unit requires 5 pounds of direct material B at a cost of $2.00 per pound. The March 31 Raw Materials Inventory has 220 pounds of B. Each month's ending Raw Materials Inventory should be 30% of the following month's production needs. The budgeted production for May is:
Multiple Choice
300 units.
248 units.
308 units.
428 units.
Explanation / Answer
Production for may = Sales unit+desired ending inventory-beginning inventory
= 300+(320*40%)-(300*40%)
Production for may = 308 units
so answer is c) 308 units