EB5. LO 7.2 Cloud Shoes manufactures recovery sandals and is planning on producing 12,000 units in March and 11,500 in April. Each sandal requires 1.2 yards of material, which costs $3.00 per yard. The company's policy is to have enough material on hand to equal 15% of next month's production needs and to maintain a finished goods inventory equal to 20% of the next month’s production needs. What is the budgeted cost of purchases for March?
EB5. LO 7.2 Cloud Shoes manufactures recovery sandals and is planning on producing 12,000 units in March and 11,500 in April. Each sandal requires 1.2 yards of material, which costs $3.00 per yard. The company's policy is to have enough material on hand to equal 15% of next month's production needs and to maintain a finished goods inventory equal to 20% of the next month’s production needs. What is the budgeted cost of purchases for March?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![EB5. LO 7.2 Cloud Shoes manufactures recovery sandals and is planning on producing
12,000 units in March and 11,500 in April. Each sandal requires 1.2 yards of material, which
costs $3.00 per yard. The company's policy is to have enough material on hand to equal 15%
of next month's production needs and to maintain a finished goods inventory equal to 20% of
the next month's production needs. What is the budgeted cost of purchases for March?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F67f65034-4034-43a1-8c04-ae6a6c5a5e33%2Fddb5b965-9b41-47a7-a798-99bed5847eb3%2Fy8juxvd_processed.png&w=3840&q=75)
Transcribed Image Text:EB5. LO 7.2 Cloud Shoes manufactures recovery sandals and is planning on producing
12,000 units in March and 11,500 in April. Each sandal requires 1.2 yards of material, which
costs $3.00 per yard. The company's policy is to have enough material on hand to equal 15%
of next month's production needs and to maintain a finished goods inventory equal to 20% of
the next month's production needs. What is the budgeted cost of purchases for March?
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