The Manzoni Corporation manufactures and sells a single product. They are in the process of...

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The Manzoni Corporation manufactures and sells a single product. They are in the process of preparing next quarter’s budget and have provided the following data.

Finished goods inventory, July 1	2,000 units
Desired finished goods inventory, July 31	2,500 units
Desired finished goods inventory, August 31	2,400 units
Projected sales, July	6,000 units
Projected sales, August	7,500 units
Raw material required per unit	5 pounds
Estimated raw material cost	$9 per pound
Direct labor required per unit	2 hours
Estimated direct labor rate	$16 per hour
Factory overhead rate (based on direct labor)	$12 per hour

Company policy is to have enough material on hand at the end of each month to meet 30% of the following month’s production needs.

How many pounds of material does Manzoni plan to purchase in July?
What is the budgeted August 31 finished goods inventory balance (in dollars)?

a.

b.

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Robert · Accepted Answer

1. The Manzoni Corporation manufactures and sells a single product.  They are in the 
process of preparing next quarter’s budget and have provided the following data.
 Finished goods inventory, July 1 2,000 units 
 Desired finished goods inventory, July 31 2,500 units 
 Desired finished goods inventory, August 31 2,400 units 
 Projected sales, July 6,000 units 
 Projected sales, August 7,

The Manzoni Corporation manufactures and sells a single product. They are in the process of preparing next quarter’s budget and have provided the following data. Finished goods inventory, July 1 2,000...

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