Cahuilla Corporation predicts the following sales in units for the coming four months: Each month's ending Finished Goods Inventory should be 40% of the next month's sales. March 31 Finished Goods inventory is 96 units. A finished unit requires five pounds of direct material B at a cost of $2.00 per pound. The March 31 Raw Materials Inventory has 200 pounds of B. Each month's ending Raw Materials Inventory should be 30% of the following month's production needs. The budgeted purchases of pounds of direct material B during May should be:
A) 1,422 lbs.
B) 288 lbs.
C) 1,854 lbs.
D) 276 lbs.
E) 1,008 lbs.

Question

Cahuilla Corporation predicts the following sales in units for the coming four months:  Each month's ending Finished Goods Inventory should be 40% of the next month's sales. March 31 Finished Goods inventory is 96 units. A finished unit requires five pounds of direct material B at a cost of $2.00 per pound. The March 31 Raw Materials Inventory has 200 pounds of B. Each month's ending Raw Materials Inventory should be 30% of the following month's production needs. The budgeted purchases of pounds of direct material B during May should be:
A) 1,422 lbs. 
B) 288 lbs. 
C) 1,854 lbs. 
D) 276 lbs. 
E) 1,008 lbs.

Quizplus · Accepted Answer

The Answer of Cahuilla Corporation predicts the following sales in units for the coming four months:  Each month's ending Finished Goods Inventory should be 40% of the next month's sales. March 31 Finished Goods inventory is 96 units. A finished unit requires five pounds of direct material B at a cost of $2.00 per pound. The March 31 Raw Materials Inventory has 200 pounds of B. Each month's ending Raw Materials Inventory should be 30% of the following month's production needs. The budgeted purchases of pounds of direct material B during May should be:
A) 1,422 lbs. 
B) 288 lbs. 
C) 1,854 lbs. 
D) 276 lbs. 
E) 1,008 lbs.

Cahuilla Corporation Predicts the Following Sales in Units for the Coming