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 cost of direct material B during May should be:
A) $576.
B) $3,708.
C) $552.
D) $2,016.
E) $2,844.

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 cost of direct material B during May should be:
A) $576. 
B) $3,708. 
C) $552. 
D) $2,016. 
E) $2,844.

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 cost of direct material B during May should be:
A) $576. 
B) $3,708. 
C) $552. 
D) $2,016. 
E) $2,844.

Cahuilla Corporation Predicts the Following Sales in Units for the Coming