Wynn, Inc. manufactures beanies. The budgeted units to be produced and sold are below:
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, 3,150 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:  
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, 3,150 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:  
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, 3,150 yards of yarn were on hand.
Instructions
Compute the budgeted cost of purchases.

Wynn, Inc Manufactures Beanies