Addams, Inc., is preparing its master budget for the second quarter. The following sales and production data have been forecasted:
$$\begin{array} { l | l | l | l | l | l }
& \text { April } & \text { May } & \text { June } & \underline { \text { July } } & \text { August } \
\hline \text { Unit sales } \ldots \ldots & 400 & 500 & 520 & 480 & 540
\end{array}$$ Finished goods inventory on March 31: 120 units Raw materials inventory on March 31: 450 pounds
Desired ending inventory each month: Finished goods: 30% of next month's sales
Raw materials: 25% of next month's production needs
Number of pounds of raw material required per finished unit: 4 lbs. How many pounds of raw materials should be purchased in April?

Question

Addams, Inc., is preparing its master budget for the second quarter. The following sales and production data have been forecasted:
 $$\begin{array} { l | l | l | l | l | l } 
& \text { April } & \text { May } & \text { June } & \underline { \text { July } } & \text { August } \
\hline \text { Unit sales } \ldots \ldots & 400 & 500 & 520 & 480 & 540
\end{array}$$ Finished goods inventory on March 31: 120 units Raw materials inventory on March 31: 450 pounds
Desired ending inventory each month: Finished goods: 30% of next month's sales
Raw materials: 25% of next month's production needs
Number of pounds of raw material required per finished unit: 4 lbs. How many pounds of raw materials should be purchased in April?

Quizplus · Accepted Answer

The Answer of Addams, Inc., is preparing its master budget for the second quarter. The following sales and production data have been forecasted:
 $$\begin{array} { l | l | l | l | l | l } 
& \text { April } & \text { May } & \text { June } & \underline { \text { July } } & \text { August } \
\hline \text { Unit sales } \ldots \ldots & 400 & 500 & 520 & 480 & 540
\end{array}$$ Finished goods inventory on March 31: 120 units Raw materials inventory on March 31: 450 pounds
Desired ending inventory each month: Finished goods: 30% of next month's sales
Raw materials: 25% of next month's production needs
Number of pounds of raw material required per finished unit: 4 lbs. How many pounds of raw materials should be purchased in April?

Addams, Inc Finished Goods Inventory on March 31: 120 Units Raw Materials