Balmforth Products, Inc. makes and sells a single product called a Bik. It takes three yards of Material A to make one Bik. Budgeted production of Biks for the next five months is as follows: The company wants to maintain monthly ending inventories of Material A equal to 20% of the following month's production needs. On January 31, this target had not been attained since only 2,000 yards of Material A were on hand. The cost of Material A is $0.80 per yard. The company wants to prepare a Direct Materials Purchases Budget. The total needs (i.e., production requirements plus desired ending inventory) of Material A for the month of May are:

Respuesta :

Answer:

46,500 yards

Explanation:

Calculation to determine the Total needs of Material A for the month of May

Using this formula

Total needs =Production requirement+Desired ending Inventory

Let plug in the formula

Total needs=12,600*3+($14,500*20%*3)

Total needs=37,800+8,700

Total needs=46,500 yards

Therefore the Total needs of Material A for the month of May is 46,500 yards.