Cahuilla Corporation predicts the following sales in units for the coming four months:
Each month's ending Finished Goods Inventory in units should be 40% of the next month's sales. March 31 Finished Goods inventory is 96 units. A finished unit requires five pounds of direct material B at a cost of $2.00 per pound. The March 31 Raw Materials Inventory has 200 pounds of direct material B. Each month's ending Raw Materials Inventory should be 30% of the following month's production needs. The budgeted purchases of pounds of direct material B during May should be:
A) 1,422 lbs.
B) 288 lbs.
C) 1,854 lbs.
D) 276 lbs.
E) 1,008 lbs.

Question

Cahuilla Corporation predicts the following sales in units for the coming four months:  
Each month's ending Finished Goods Inventory in units should be 40% of the next month's sales. March 31 Finished Goods inventory is 96 units. A finished unit requires five pounds of direct material B at a cost of $2.00 per pound. The March 31 Raw Materials Inventory has 200 pounds of direct material B. Each month's ending Raw Materials Inventory should be 30% of the following month's production needs. The budgeted purchases of pounds of direct material B during May should be:
A) 1,422 lbs. 
B) 288 lbs. 
C) 1,854 lbs. 
D) 276 lbs. 
E) 1,008 lbs.

Quizplus · Accepted Answer

Required production for May:
 11eaadfd_cd05_2941_95d8_255f744ab794_TB6948_00 Required production for June:
 11eaadfd_cd05_2942_95d8_2d924105b883_TB6948_00 Required purchase of raw Material B:
 11eaadfd_cd05_5053_95d8_41534afd2e3b_TB6948_00

Cahuilla Corporation Predicts the Following Sales in Units for the Coming