Answer Happy

Sunrise Poles manufactures hiking poles and is planning on producing 4,000 units in March and 3,700 units in April. Each pole requires a half pound of material, which costs $0.80 per pound. The company's policy is have enough material on hand to equal 10% of the next month's production needs and to maintain a finished goods inventory equal to 25% of the next month's production needs. What is the budgeted cost of purchases for March? Budgeted cost of purchases Feedback 2,263 X Check My Work Multiply the units to be produced in the current period by the pounds per unit to determine the pounds for production. Next, determine the desired ending inventory in pounds and add that amount to the pounds needed. Then determine the amount of the previous month's ending balance, or this month's beginning balance and subtract this amount from the amount of pounds needed to purchase. Lastly, multiply the total pounds of material needed by the cost per pound.