Hale Co. manufactures beanies. The budgeted units to be produced and sold are below:
It takes 24 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, 3,720 yards of yarn were on hand.
Instructions
Compute the budgeted cost of purchases.

Question

Hale Co. manufactures beanies. The budgeted units to be produced and sold are below:  
It takes 24 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, 3,720 yards of yarn were on hand.
Instructions
Compute the budgeted cost of purchases.

Quizplus · Accepted Answer

The Answer of Hale Co. manufactures beanies. The budgeted units to be produced and sold are below:  
It takes 24 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, 3,720 yards of yarn were on hand.
Instructions
Compute the budgeted cost of purchases.

Hale Co Manufactures Beanies