Solution-Calculate the amount of raw materials and finished

Calculate the amount of raw materials and finished goods

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Reference no: EM132984876

Question - Palm Imagination makes and sells silk palm trees. Each tree uses 0.80 yards of silk fabric. Budgeted production of trees in units for the next five months is as follows:

	April	May	June	July	August
Budgeted production	24,160	23,490	26,570	26,880	22,900
Budgeted sales	24,500	22,800	26,250	27,850	23,000

The company wants to maintain monthly ending inventories of fabric equal to 15% of the following month's budgeted production needs, and monthly inventories of trees equal to 20% of the number needed for next month's sales. The cost of silk is $2.00 per yard. Direct labor cost is $14.00 per hour and it takes 66 minutes to complete each tree. Factory overhead is applied at the rate of $1.25 per direct labor dollar.

Required -

1. Prepare a direct materials purchases budget for June.

2. Calculate the amount of Raw Materials and Finished Goods Inventory to be reported on Palm Imagination's June 30 balance sheet.

Reference no: EM132984876

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Calculate the amount of raw materials and finished goods

Reference no: EM132984876

Reference no: EM132984876

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