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A company produces a product that requires 2 pound raw material on hand at the end of June. At the end a month's raw material requirements on hand. The comm September, and October to be 10,000, 12,000, 13,00 sells for $1.00 per pound. the month of September raw material purchases an

A company produces a product that requires 2 pound raw material on hand at the end of June. At the end a month's raw material requirements on hand. The comm September, and October to be 10,000, 12,000, 13,00 sells for $1.00 per pound. the month of September raw material purchases an

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 15E: Palmgren Company produces consumer products. The sales budget for four months of the year is...
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Fact Pattern: A company produces a product that requires 2 pounds of a raw material. It is forecast that there will be 6,000 pounds of raw material on hand at the end of June. At the end of any given month, the company wishes to have 30% of next month's raw material requirements on hand. The company has budgeted production of the product for July, August, September, and October to be 10,000, 12,000, 13,000, and 11,000 units, respectively. As of June 1, the raw material sells for $1.00 per pound. In the month of September, raw material purchases and ending inventory, respectively, will be (in pounds): OA. OB. O C. 24,800 and 6,600. 32,600 and 6,600. 24,800 and 3,900. OD. 13,000 and 3,900.
Transcribed Image Text:Fact Pattern: A company produces a product that requires 2 pounds of a raw material. It is forecast that there will be 6,000 pounds of raw material on hand at the end of June. At the end of any given month, the company wishes to have 30% of next month's raw material requirements on hand. The company has budgeted production of the product for July, August, September, and October to be 10,000, 12,000, 13,000, and 11,000 units, respectively. As of June 1, the raw material sells for $1.00 per pound. In the month of September, raw material purchases and ending inventory, respectively, will be (in pounds): OA. OB. O C. 24,800 and 6,600. 32,600 and 6,600. 24,800 and 3,900. OD. 13,000 and 3,900.
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