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Question - Maya Inc, makes and sells a single product, Product R. Three yards of Material K are needed to make one unit of Product R. Budgeted production of Product R for the next five months is as follows:
Aug 13,000
Sep 13,500
Oct 14,500
Nov 13,600
Dec 12,900
The company wants to maintain monthly ending inventories of Material K equal to 30% of the following month's production needs. On July 31, this requirement was not met because only 3,500 yards of Material K were on hand. The cost of Material K is $0.80 per yard. The company wants to create a Direct Materials Purchase Budget for the rest of the year.
What is the desired ending inventory of material k for Sep?
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