Production budget / cost of direct material purchases
Not what you're looking for?
Cooper Tractors plans to sell 400,000 units of finished product in July 20x1. Management (1) anticipates a growth rate in sales of 5% per month thereafter and (2) desires a monthly ending finished-goods inventory (in units) of 80% of the following month's estimated sales. There are 300,000 completed units in the June 30, 20x1 inventory.
Each unit of finished product requires four pounds of direct material at a cost of $1.50 per pound. There are 1,600,000 pounds of direct material in inventory on June 30, 20x1. (7 points)
1. Prepare a production budget for the quarter ended September 30, 20x1.
2. Assume that Cooper plans to produce 1,200,000 units of finished product for the quarter ended September 30. Compute the cost of direct material purchases for this quarter if Cooper desires to stock direct materials at the end of this period equal to 25% of current production usage.
Purchase this Solution
Solution Summary
The solution explains how to prepare a production budget and estimate the cost of direct material purchase
Purchase this Solution
Free BrainMass Quizzes
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Basics of corporate finance
These questions will test you on your knowledge of finance.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce