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ABCL Corporation predicts the following sales in units for the coming four months:                                   May     June  July      August    September Unit sales ……           400    500     520        480        540   Finished goods inventory on April 30: 120 units Raw materials inventory on April 30: 450 pounds   Desired ending inventory each month: Finished goods: 30% of next month's sales Raw materials: 25% of next month's production needs Number of pounds of raw material required per finished unit: 4 lbs.   Required: How many pounds of raw materials should be purchased in May?

ABCL Corporation predicts the following sales in units for the coming four months:                                   May     June  July      August    September Unit sales ……           400    500     520        480        540   Finished goods inventory on April 30: 120 units Raw materials inventory on April 30: 450 pounds   Desired ending inventory each month: Finished goods: 30% of next month's sales Raw materials: 25% of next month's production needs Number of pounds of raw material required per finished unit: 4 lbs.   Required: How many pounds of raw materials should be purchased in May?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ABCL Corporation predicts the following sales in units for the coming four months:

 

                                May     June  July      August    September

Unit sales ……           400    500     520        480        540

 

Finished goods inventory on April 30: 120 units

Raw materials inventory on April 30: 450 pounds

 

Desired ending inventory each month:

Finished goods: 30% of next month's sales

Raw materials: 25% of next month's production needs

Number of pounds of raw material required per finished unit: 4 lbs.

 

Required:

How many pounds of raw materials should be purchased in May?

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