Anticipates that 120,000 units of product K will be sold during May. Each unit of product K requires four units of raw material A. Actual inventories as of May 1 and budgeted inventories as of May 31 follow: May 1 May 31 Product K 55,000 60,000 Raw material A 40,000 37,000 Each unit of raw material A costs $8; RPR pays for all purchases in the month of acquisition. Invoices that account for 80% of the cost of materials acquired will be paid within 10 days of receipt, entitling the company to a 2% cash discount.
Determine the number of units of product K to be manufactured in May. Compute the May cash outlay for purchases of raw material A. I'm using your information to double check my calculations.