C.J.'s Cookie Company produces chocolate chip cookies. Raw materials inventory includes flour, sugar, and chocolate chips at standard cost of $5.00 per pound. C.J. uses 1/20 of a pound of raw materials per cookie. CJ's anticipates quarterly sales as follows:
Beginning finished goods inventory is 90,000 cookies. Beginning raw materials inventory is 6,000 pounds. Target raw materials = 40% of next quarter's material needs. Target finished goods inventory is 30% of next quarter's sales. Planned production for 1 st quarter 2013 is 440,000.
-What is the budgeted amount of pounds of direct materials that need to be purchased for the third quarter, 2012?

Question

C.J.'s Cookie Company produces chocolate chip cookies. Raw materials inventory includes flour, sugar, and chocolate chips at standard cost of $5.00 per pound. C.J. uses 1/20 of a pound of raw materials per cookie. CJ's anticipates quarterly sales as follows:
 Beginning finished goods inventory is 90,000 cookies. Beginning raw materials inventory is 6,000 pounds. Target raw materials = 40% of next quarter's material needs. Target finished goods inventory is 30% of next quarter's sales. Planned production for 1 st quarter 2013 is 440,000. 
-What is the budgeted amount of pounds of direct materials that need to be purchased for the third quarter, 2012?

Quizplus · Accepted Answer

The budgeted amount of pounds of direct materials needed for purchase is calculated based on the production needs for the period, taking into account the beginning and desired ending inventory levels, as well as any adjustments for materials per unit of production. Without specific data provided in the question, such as production plans, inventory levels, or material usage rates, it's not possible to accurately calculate or justify the correct answer. However, given that A is the correct choice, it suggests that based on the hypothetical data or scenario provided in a question not fully displayed here, 18,550 pounds of direct materials are needed for the third quarter of 2012.

CJ'S Cookie Company Produces Chocolate Chip Cookies