JENNYCIS Corporation sells birdhouses. The company has prepared the following forecast for the third quarter of 2010: July 5 000 August 6 000 September 10 000 Inventory of finished goods in June 30, 2010 is budgeted at 1000 units. Management would like the desired quantity of finished goods inventory at the end of each month to equal 20% of next month’s budgeted sales. October’s projected sales are 12 000 units. Each completed unit of finished product requires 3 square feet of raw materials at a cost of P15 per square foot. The company has determined that it needs 10% of next month’s raw material needs on hand at the end of each month. 1. The cost of direct material that should be purchased in August is?
JENNYCIS Corporation sells birdhouses. The company has prepared the following
July 5 000
August 6 000
September 10 000
Inventory of finished goods in June 30, 2010 is budgeted at 1000 units. Management would like the desired quantity of finished goods inventory at the end of each month to equal 20% of next month’s budgeted sales. October’s projected sales are 12 000 units.
Each completed unit of finished product requires 3 square feet of raw materials at a cost of P15 per square foot. The company has determined that it needs 10% of next month’s raw material needs on hand at the end of each month.
1. The cost of direct material that should be purchased in August is?
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