Answer:
Instructions are below.
Explanation:
Giving the following information:
Production (units):
April= 642
May= 670
June= 676
July= 656
Each finished unit requires four pounds of raw materials.
Desired ending inventory= 40% of next month’s production needs.
Beginning raw materials= 1,027 pounds.
Direct materials= $4 per pound.
We need to use the following formula to calculate the purchases:
Purchases= production + desired ending inventory - beginning inventory
<u>April (In pounds):</u>
Production= 642*4= 2,568
Ending inventory= (670*4)*0.4= 1,072
Beginning inventory= (1,027)
Total= 2,613
Total cost= 2,613*4= $10,452
<u>May (In pounds):</u>
Production= 670*4= 2,680
Ending inventory= (676*4)*0.4= 1,082
Beginning inventory= (1,072)
Total= 2,690
Total cost= 2,690*4= $10,760
<u>June (In pounds):</u>
Production= 676*4= 2,704
Ending inventory= (656*4)*0.4= 1,050
Beginning inventory= (1,082)
Total= 2,672
Total cost= 2,672*4= $10,688
