Question

Becker Bikes manufactures tricycles. The company expects to sell 540 units in May and 670 units in June. Beginning and ending finished goods for May is expected to be 190 and 155 units, respectively. June's ending finished goods is expected to be 165 units Each unit requires 3 wheels at a cost of $24 per wheel. Becker requires 20 percent of next month's material production needs on hand each month July's production units is expected to be 640 units. Compute Becker's direct materials purchases budget with respect to wheels for May and June

Answer 1

Answer:

Explanation:

Sales budget for may = 540

Sales budget for June = 670

Opening inventory for may = 190

Closing inventory for May = 155

Production in may =( 190+540)-155=575

Opening inventory in June = 155

Closing inventory = 165

Production in June = (155+670)-165=660

May material needs = 3(575+ (20%*660)

=3*707=2121 wheels

2121*24=$50,904

June material needs =3(660+(20%*640)

3*788=2364

2364*24=$56,736