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

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:

Quizplus · Accepted Answer

The budgeted required production for May is computed as follows: 11ea7998_5d6e_be9c_911b_33953faebf86_TB2627_00_TB2627_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: 11ea7998_5d6e_be9d_911b_47af2869849a_TB2627_00_TB2627_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: 11ea7998_5d6e_e5ae_911b_510f1f8eb5e7_TB2627_00_TB2627_00

Sleeter Corporation Makes One Product and It Provided the Following