Purchases budget
Response to the following :
In addition to the information presented in problem, each unit that ABC Company produces uses 3 pounds of raw material. ABC requires 25% of the next month's budgeted production as raw material inventory each month.
Required: Calculate the number of pounds of raw material to be purchased in June.
Problem:
Production budget
ABC Company's budgeted sales for June, July, and August are 12,000, 16,000, and 14,000 units, respectively. ABC requires 30% of the next month's budgeted unit sales as finished goods inventory each month. Budgeted ending finished goods inventory for May is 3,600 units.
Required: Calculate the number of units to be produced in June and July.