Barry Co.manufactures leather briefcases and carryalls.Barry's production manager has provided the following production budget.Each briefcase or carryall requires 1.2 yards of leather fabric and Barry maintains an ending inventory of leather fabric equal to 25% of the next month's production needs.
If each yard of leather fabric costs $8.60,how much should Barry budget for purchases of fabric in April?
A) $784,320
B) $629,520
C) $619,200
D) $524,600

Question

Barry Co.manufactures leather briefcases and carryalls.Barry's production manager has provided the following production budget.Each briefcase or carryall requires 1.2 yards of leather fabric and Barry maintains an ending inventory of leather fabric equal to 25% of the next month's production needs.
  If each yard of leather fabric costs $8.60,how much should Barry budget for purchases of fabric in April? 
A) $784,320 
B) $629,520 
C) $619,200 
D) $524,600

Quizplus · Accepted Answer

60,000 x 1.2 - [60,000 ÷ 4 x 1.2] + [64,000 ÷ 4 x 1.2] = 73,200
73,200 yards x $8.60 per yard = $629,520

Barry CoManufactures Leather Briefcases and Carryalls