Question

Balmforth Products, Inc. makes and sells a single product called a Bik. It takes three yards of Material A to make one Bik. Budgeted production of Biks for the next five months is as follows:

February 14,000 units
March 15,500 units
April 11,900 units
May 12,600 units
June 14,500 units
The company wants to maintain monthly ending inventories of material A equal to 10% of the following month's production needs. On March 31, this target had not been met since only 1,500 yards of material A were on hand. The cost of Material A is $0.80 per yard. The company wants to prepare a Direct Materials Purchases Budget. The desired ending inventory for June is:____.

Answer 1

the desired ending inventory for JUne is 4,350 yards

Step-by-step explanation:

the computation of the desired ending inventory for JUne is shown below;

= June production × given percentage × number of yards taken

= 14,500 units × 10% × 3 yards

= 4,350 yards

Hence, the desired ending inventory for JUne is 4,350 yards

The same should be considered and relevant