Victoria Corporation manufactures quality vases.Budgeted sales and production data for the vases are as follows:

The ending inventory for each month should be equal to 20% of the next month's production needs.Each vase requires one pound of clay in its manufacture.Victoria Corporation has a policy that the inventory of clay at the end of each month needs to be equal to 20% of the production needs for the following month.At the beginning of January,480 pounds of clay were in inventory.How many pounds of clay would Victoria Corporation need to purchase in February (Month 2?

Question

Victoria Corporation manufactures quality vases.Budgeted sales and production data for the vases are as follows:

The ending inventory for each month should be equal to 20% of the next month's production needs.Each vase requires one pound of clay in its manufacture.Victoria Corporation has a policy that the inventory of clay at the end of each month needs to be equal to 20% of the production needs for the following month.At the beginning of January,480 pounds of clay were in inventory.How many pounds of clay would Victoria Corporation need to purchase in February (Month 2?

Quizplus · Accepted Answer

D)
Production Month 2 2,700
Less BI (2,700 × 20%)- 540
Plus EI (3,400 × 20%)+680
Equals Purchases 2,840

Victoria Corporation Manufactures Quality Vases