Question

Each month's ending finished goods inventory should be 40% of the next month's sales. March 31 finished goods inventory is 172 units. A finished unit requires five pounds of direct material B at a cost of $3.00 per pound. The March 31 Raw Materials Inventory has 280 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:

Answer 1

Answer:

478 units

Explanation:

Calculation to determine what The budgeted production for May is:

First step

Ending inventory= (40% * 490)

Ending inventory=196

Second step

Beginning inventory= (40% * 470)

Beginning inventory= 188

Now let determine the budgeted production for May budgeted production

= 470 + 196 - 188

May budgeted production= 478 units to produce

Therefore The budgeted production for May is:478