The following information applies to questions 20-23 The following information (in units of finished goods) was obtained from Kiuy Limited's production budget: July August September Closing inventory 840 900 1,100 Production 1,800 2,100 3,200 Each unit requires 20 metres of fabric, which costs $37 per metre. Raw materials inventory at the end of each month should be 61% of the following month's production requirements. 30% of the cost of raw materials purchases is paid in the month of purchase and the remainder is paid in the following month. At the beginning of July, the raw materials inventory is expected to be 7,000 metres. Prepare a raw materials budget and use it to answer Following questions 1. Calculate the quantity of fabric, in metres, required for production in July. 2. Calculate the quantity of fabric, in metres, required for production in August. 3. Calculate the closing raw materials inventory, in metres, for July. 4. Calculate the required purchases of raw materials inventory, in metres, for July.
The following information applies to questions 20-23
The following information (in units of finished goods) was obtained from Kiuy Limited's production budget:
|
July |
August |
September |
|
|
Closing inventory |
840 |
900 |
1,100 |
|
Production |
1,800 |
2,100 |
3,200 |
Each unit requires 20 metres of fabric, which costs $37 per metre.
Raw materials inventory at the end of each month should be 61% of the following month's production requirements. 30% of the cost of raw materials purchases is paid in the month of purchase and the remainder is paid in the following month. At the beginning of July, the raw materials inventory is expected to be 7,000 metres.
Prepare a raw materials budget and use it to answer Following questions
1. Calculate the quantity of fabric, in metres, required for production in July.
2. Calculate the quantity of fabric, in metres, required for production in August.
3. Calculate the closing raw materials inventory, in metres, for July.
4. Calculate the required purchases of raw materials inventory, in metres, for July.
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