Purchase Solution

Finding the Cost of Inventory

Not what you're looking for?

Ask Custom Question

Donnelly Manufacturing sells cedar birdhouses. The company has prepared the following forecast for the third quarter of 2009:
July 5,000 units
August 6,000 units
September 10,000 units

Inventory at June 30, 2009 was budgeted at 1,000 units. Management would like the desired quantity of finished goods inventory at the end of each month to be equal to 20% of next month's budgeted unit sales. October's sales are projected to be 12,000 units.

Each completed unit of finished product requires 3 square feet of cedar at a cost of $1.50 per square foot.

Refer to the Donnelly Manufacturing information above. The company has determined that it needs 10 percent of next month's raw material needs on hand at the end of each month.

The cost of the direct material that should be purchased in August is?

Purchase this Solution
Solution Summary

This solution illustrates how to construct a raw materials budget to find ending dudgeted raw materials inventory.

Solution Preview

Please see the attached Excel 97-2003 spreadsheet for the complete solution.

Donnelly Manufacturing sells cedar birdhouses. The company has prepared the following forecast for the third quarter of 2009:
July                 5,000 units
August                 6,000 units
September 10,000 units

Inventory at June 30, 2009 was budgeted at 1,000 units. ...

Purchase this Solution
Free BrainMass Quizzes
Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

View More Free Quizzes
Related BrainMass Solutions

  • Missing Amounts

    60,000 Gross Profit = Net Sales - Cost of Goods Sold Gross Profit = 250,000-180,000 = 70,000 The solution explains how to determine the missing amounts.

  • Finding Financial Statements

    137207 Finding Financial Statements Hi, I need help finding the financial statements of a service company and of a merchandising company on the following website.

  • Finding the Economic Order Quantity

    328655 Finding the Economic Order Quantity Question: Jerry's Retail expects a total sales of 2,000 units. The firm estimates an ordering cost of $7.50 per order, with an inventory cost of $0.70 per unit. What is the economic ordering quantity?

  • Net Present Value

    We need to find out the savings that the new software system can provide by finding the amount of inventory that will be reduce after the use of the new software system.

  • Inventory management

    What is the annual cost for ordering item X? c. What is the annual cost for storing item X? Annual demand usage (average), D = 2000 Cost of the item, C = $25 Storage/Inventory cost.

  • Finding cost of goods destroyed

    644817 Finding cost of goods destroyed Alan Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $35,300.

  • Ratio Calculation

    Cost of goods sold is used since the inventory value is reflected in the cost of goods sold. It tells us how many times the inventory changes into cash during the year. Total Asset Turnover is calculated by diving the sales by the total assets.

  • T-accounts / finding beg. balance

    95767 T-accounts / finding beg. balance Find the beg. balance of Work in Process - Refining Department. The book says the balance was in the given information. I put the given info. in gray.

  • Purchasing and Supply Management - Essay Question

    The third step is sweep, which would require finding the source of why there is waste or disorganization and finding a solution so that it does not keep occurring. This ensures future efficiency and cuts cost by eliminating the source of waste.

  • Economic Order Quantity (EOQ): An Example

    Please see the attched file An inventory model example problem for finding economic order quantity or economic lot size with uniform rate of demand is done. Formulae for EOQ and Minimum average cost are given.

View More Related Solutions