Sleeter Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations:
A.Budgeted unit sales for April,May,June,and July are 7,500,11,900,10,800,and 14,800 units,respectively.All sales are on credit.
B.The ending finished goods inventory equals 30% of the following month's sales.
C.The ending raw materials inventory equals 30% of the following month's raw materials production needs.Each unit of finished goods requires 6 pounds of raw materials.The raw materials cost $5.00 per pound.
If 72,000 pounds of raw materials are required for production in June,then the budgeted cost of raw material purchases for May is closest to:

Question

Quizplus · Accepted Answer

The budgeted required production for May is computed as follows:
 11ea7761_17a6_9edc_81a5_4d585e8dee03_TB2580_00 *June sales of 10,800 units × 30% = 3,240 units
** May sales of 11,900 units × 30%= 3,570 units
The budgeted raw material purchases for May are computed as follows:
 11ea7761_17a6_9edd_81a5_f543e93e2e11_TB2580_00 * 72,000 pounds × 30% = 21,600 pounds.
** 69,420 pounds × 30% = 20,826 pounds.
The budgeted cost of raw material purchases for May is computed as follows:
 11ea7761_17a6_c5ee_81a5_7bc0f9e7c8f8_TB2580_00

Sleeter Corporation Makes One Product and It Provided the Following