Carteret Inc.
Carteret Inc. manufactures hammocks under various brand names. The company sells most of its hammocks in the second quarter of each year. Their production budget for the second quarter shows the following number of hammocks needs to be produced:
$$\begin{array} { l r }
\text { April } & 6000 \text { units } \
\text { May } & 10000 \text { units } \
\text { June } & 15000 \text { units }
\end{array}$$
Each unit requires 30 feet of cotton rope cord which costs $.50 per foot. The company has determined that it needs 20 per cent of next month’s raw material needs on hand at the end of each month.
In addition, each hammock requires 45 minutes of direct labour for assembly and inspection at a cost of $.25 per minute. The company currently applies manufacturing overhead to production at the rate of $8 per direct labour hour.
-The cost of the rope cord that should be purchased in May is:

Question

Carteret Inc.
Carteret Inc. manufactures hammocks under various brand names. The company sells most of its hammocks in the second quarter of each year. Their production budget for the second quarter shows the following number of hammocks needs to be produced:
$$\begin{array} { l r } 
\text { April } & 6000 \text { units } \
\text { May } & 10000 \text { units } \
\text { June } & 15000 \text { units }
\end{array}$$
Each unit requires 30 feet of cotton rope cord which costs $.50 per foot. The company has determined that it needs 20 per cent of next month’s raw material needs on hand at the end of each month.
In addition, each hammock requires 45 minutes of direct labour for assembly and inspection at a cost of $.25 per minute. The company currently applies manufacturing overhead to production at the rate of $8 per direct labour hour.
-The cost of the rope cord that should be purchased in May is:

Quizplus · Accepted Answer

To calculate the cost of the rope cord that should be purchased in May, we need to consider the production needs for May and June (since 20% of June's needs must be on hand at the end of May), and the cost per foot of rope cord.For May:- Units to be produced: 10,000- Rope needed per unit: 30 feet- Total rope needed for May production: 10,000 units * 30 feet/unit = 300,000 feetFor June (20% of June's needs to be on hand at the end of May):- Units to be produced in June: 15,000- Rope needed per unit: 30 feet- Total rope needed for June production: 15,000 units * 30 feet/unit = 450,000 feet- 20% of June's rope needs: 450,000 feet * 20% = 90,000 feetTotal rope needed for purchase in May:- Rope for May's production + 20% of June's rope needs = 300,000 feet + 90,000 feet = 390,000 feetCost of rope cord:- Cost per foot: $.50- Total cost for May's purchase: 390,000 feet * $.50/foot = $195,000

Carteret Inc Each Unit Requires 30 Feet of Cotton Rope Cord Which