RyRy, Inc. manufactures dance apparel. Unit sales projections for the first five months of the upcoming year are as follows:
Beginning finished goods inventory consisted of 850 units. The desired inventory of units at the end of each month in the upcoming year should equal 25% of the following month’s budgeted unit sales.
Each unit requires 2 yards of fabric. The company wants to have 20% of the fabric required for the next month’s expected production on hand at the end of each month. This inventory requirement was met at the end of the previous year. The fabric costs $0.20 per yard.
What is the expected dollar amount of raw material purchases for the first quarter of the upcoming year?
(round to the nearest dollar and use commas where appropriate)
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