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B The Premium Rice Company anticipates selling 400,000 half-a-kilo bags of rice in July, 450,000 half-a-kilo bags in August, and 500,000 half-a-kilo bags in September. The company plans to start July with the following inventories: • Half-a-kilo bags of rice ready for sale (i.e., finished goods): 8,000 units . Unused rice bags: 15,000 items ⚫ Rice grains: 25,000 kilos To make a half-a-kilo bag of rice, the company uses one bag item and half a kilo of rice grains. Starting from July, the company has decided to carry finished goods inventory at the end of each month equal to 10% of the next month's projected sales. Furthermore, inventories of direct materials (unused rice bags and rice grains) should be sufficient to produce 15% of the next month's sales. Required: (a) How many finished good units will need to be produced during July? Provide detailed calculations. (b) How many rice grain kilos are used in the production of finished goods during August? Provide detailed calculations.

B The Premium Rice Company anticipates selling 400,000 half-a-kilo bags of rice in July, 450,000 half-a-kilo bags in August, and 500,000 half-a-kilo bags in September. The company plans to start July with the following inventories: • Half-a-kilo bags of rice ready for sale (i.e., finished goods): 8,000 units . Unused rice bags: 15,000 items ⚫ Rice grains: 25,000 kilos To make a half-a-kilo bag of rice, the company uses one bag item and half a kilo of rice grains. Starting from July, the company has decided to carry finished goods inventory at the end of each month equal to 10% of the next month's projected sales. Furthermore, inventories of direct materials (unused rice bags and rice grains) should be sufficient to produce 15% of the next month's sales. Required: (a) How many finished good units will need to be produced during July? Provide detailed calculations. (b) How many rice grain kilos are used in the production of finished goods during August? Provide detailed calculations.

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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B The Premium Rice Company anticipates selling 400,000 half-a-kilo bags of rice in July, 450,000 half-a-kilo bags in August, and 500,000 half-a-kilo bags in September. The company plans to start July with the following inventories: • Half-a-kilo bags of rice ready for sale (i.e., finished goods): 8,000 units . Unused rice bags: 15,000 items ⚫ Rice grains: 25,000 kilos To make a half-a-kilo bag of rice, the company uses one bag item and half a kilo of rice grains. Starting from July, the company has decided to carry finished goods inventory at the end of each month equal to 10% of the next month's projected sales. Furthermore, inventories of direct materials (unused rice bags and rice grains) should be sufficient to produce 15% of the next month's sales. Required: (a) How many finished good units will need to be produced during July? Provide detailed calculations. (b) How many rice grain kilos are used in the production of finished goods during August? Provide detailed calculations.
Transcribed Image Text:B The Premium Rice Company anticipates selling 400,000 half-a-kilo bags of rice in July, 450,000 half-a-kilo bags in August, and 500,000 half-a-kilo bags in September. The company plans to start July with the following inventories: • Half-a-kilo bags of rice ready for sale (i.e., finished goods): 8,000 units . Unused rice bags: 15,000 items ⚫ Rice grains: 25,000 kilos To make a half-a-kilo bag of rice, the company uses one bag item and half a kilo of rice grains. Starting from July, the company has decided to carry finished goods inventory at the end of each month equal to 10% of the next month's projected sales. Furthermore, inventories of direct materials (unused rice bags and rice grains) should be sufficient to produce 15% of the next month's sales. Required: (a) How many finished good units will need to be produced during July? Provide detailed calculations. (b) How many rice grain kilos are used in the production of finished goods during August? Provide detailed calculations.
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