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?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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?
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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