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Question - Croy Inc. has the following projected sales for the next five months:
Month
Sales in Units
April
3,420
May
3,875
June
4,630
July
4,135
August
3,960
Croy's finished goods inventory policy is to have 70 percent of the next month's sales on hand at the end of each month. Direct material costs $3.10 per pound, and each unit requires 2 pounds. Raw materials inventory policy is to have 50 percent of the next month's production needs on hand at the end of each month. Raw materials on hand at March 31 totaled 3,739 pounds.
Required:
1. Determine budgeted production for April, May, and June.
2. Determine the budgeted cost of materials purchased for April, May, and June.
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