Wynn Inc. manufactures beanies. The budgeted units to be produced and sold are below:
$\begin{array} { l c c }
& \text { Expected Production } & \text { Expected Sales } \
\text { August } & 3,500 & 2,900 \
\text { September } & 2,800 & 3,900
\end{array}$
It takes 18 yards of yarn to produce a beanie. The company's policy is to maintain yarn at the end of each month equal to 5% of next month's production needs and to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated production needs. The cost of yarn is $0.20 a yard. At August 1 3150 yards of yarn were on hand.
Instructions
Compute the budgeted cost of purchases.

Question

Wynn Inc. manufactures beanies. The budgeted units to be produced and sold are below:
$\begin{array} { l c c } 
& \text { Expected Production } & \text { Expected Sales } \
\text { August } & 3,500 & 2,900 \
\text { September } & 2,800 & 3,900
\end{array}$
It takes 18 yards of yarn to produce a beanie. The company's policy is to maintain yarn at the end of each month equal to 5% of next month's production needs and to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated production needs. The cost of yarn is $0.20 a yard. At August 1 3150 yards of yarn were on hand.
Instructions
Compute the budgeted cost of purchases.

Quizplus · Accepted Answer

The Answer of Wynn Inc. manufactures beanies. The budgeted units to be produced and sold are below:
$\begin{array} { l c c } 
& \text { Expected Production } & \text { Expected Sales } \
\text { August } & 3,500 & 2,900 \
\text { September } & 2,800 & 3,900
\end{array}$
It takes 18 yards of yarn to produce a beanie. The company's policy is to maintain yarn at the end of each month equal to 5% of next month's production needs and to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated production needs. The cost of yarn is $0.20 a yard. At August 1 3150 yards of yarn were on hand.
Instructions
Compute the budgeted cost of purchases.

Wynn Inc Manufactures Beanies It Takes 18 Yards of Yarn to Produce a Beanie