Question

Cahuilla Corporation predicts the following sales in units for the coming four months:

April May June July
Sales in Units "u00a6"u00a6"u00a6.. 240 280 300 240

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. 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 purchases of pounds of direct material B during May should be:
A. 1,422 lbs.
B. 288 lbs.
C. 1,854 lbs.
D. 276 lbs.
E. 1,008 lbs.

Answer

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