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Expected Production 3,500 700 Expected Sa 2,800

Expected Production 3,500 700 Expected Sa 2,800

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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Accounting - Budgeted cost of direct materials

Martinez, Inc. manufactures afghans. The budgeted units to be produced and sold are as follows: August September Expected Production 3,500 2,700 Expected Sales 2,800 3,800 It takes 18 yards of yarn to produce an afghan. The company's policy is to maintain yarn at the end of each month equal to 5% of next month's production needs and to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated production needs. The cost of yarn is $0.20 a yard. At August 1, 3,150 yards of yarn were on hand. Compute the budgeted cost of direct materials purchases for August. Budgeted cost of direct materials purchases for August $
Transcribed Image Text:Martinez, Inc. manufactures afghans. The budgeted units to be produced and sold are as follows: August September Expected Production 3,500 2,700 Expected Sales 2,800 3,800 It takes 18 yards of yarn to produce an afghan. The company's policy is to maintain yarn at the end of each month equal to 5% of next month's production needs and to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated production needs. The cost of yarn is $0.20 a yard. At August 1, 3,150 yards of yarn were on hand. Compute the budgeted cost of direct materials purchases for August. Budgeted cost of direct materials purchases for August $
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