Cahuilla Corporation predicts the following sales in units for the coming four months: Each month's ending Finished Goods Inventory should be 40% of the next month's sales. March 31 finished goods inventory is 96 units. A finished unit requires five pounds of direct material B at a cost of $2.00 per pound. The March 31 Raw Materials Inventory has 200 pounds of B. Each month's ending Raw Materials Inventory should be 30% of the following month's production needs. The budgeted production for May is:
A) 232 units.
B) 168 units.
C) 400 units.
D) 280 units.
E) 288 units.

Question

Cahuilla Corporation predicts the following sales in units for the coming four months:  Each month's ending Finished Goods Inventory should be 40% of the next month's sales. March 31 finished goods inventory is 96 units. A finished unit requires five pounds of direct material B at a cost of $2.00 per pound. The March 31 Raw Materials Inventory has 200 pounds of B. Each month's ending Raw Materials Inventory should be 30% of the following month's production needs. The budgeted production for May is:
A) 232 units. 
B) 168 units. 
C) 400 units. 
D) 280 units. 
E) 288 units.

Quizplus · Accepted Answer

Required production for May:
 11eaadfd_cd04_b40f_95d8_190a90848fe9_TB6948_00

Cahuilla Corporation Predicts the Following Sales in Units for the Coming