3,510 3,830 4,520 4,190 3,940
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Projected Sales and Inventory Planning for Croy Incorporated**
Croy Incorporated has projected sales for the next five months:
| Month | Sales in Units |
|--------|----------------|
| April | 3,510 |
| May | 3,830 |
| June | 4,520 |
| July | 4,190 |
| August | 3,940 |
**Inventory Policy:**
- Croy maintains a finished goods inventory equal to 50% of the next month's sales by the end of each month.
- Direct materials cost: $3.00 per pound.
- Each unit requires 2 pounds of materials.
- Direct materials inventory policy also maintains 50% of the next month's production needs in stock at the end of each month.
- Direct materials on hand as of March 31 were 3,670 pounds.
**Requirements:**
1. Calculate budgeted production for April, May, and June.
2. Calculate the budgeted cost of direct materials purchased for April and May.
**Instructions:**
- Enter your answers in the provided tabs.
- For production calculations:
- Do not round intermediate calculations.
- Round final answers to the nearest whole number.
**Input Table for Production:**
| | April | May | June |
|----------------|-------|-----|------|
| Budgeted Production (Units) | | | |
Transcribed Image Text:**Determine Budgeted Cost of Direct Materials Purchased for April and May**
*Note:* Use rounded Budgeted Production units in intermediate calculations. Round your answers to 2 decimal places.
| | April | May |
|-----------------------|-------|-----|
| Budgeted Cost of Material Purchased | | |
This table is used to record the budgeted cost of materials purchased for the months of April and May. The instruction emphasizes the importance of rounding production units when performing intermediate calculations, ensuring the final answers are accurate to two decimal places. There are two columns labeled for each month where the budgeted costs will be entered.
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