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yuradex [85]
2 years ago
10

Cahuilla Corporation predicts the following sales in units for the coming four months:

Business
1 answer:
Strike441 [17]2 years ago
6 0

Answer:

Purchases= 1,854 pounds

Explanation:

<u>To calculate the direct material purchases, we need to use the following formula:</u>

Purchases= production + desired ending inventory - beginning inventory

Production= 280*5 + (300*0.4)*5= 2,000 pounds

Desired ending inventory= [(300*0.6)*5* + (240*0.4)*5]*0.3= 414 pounds

beginning inventory= (280*0.4)*5= (560) pounds

Purchases= 1,854 pounds

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