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Chapter 20: 28QS (page 916)

Raider-X Company forecasts sales of 18,000 units for April. Beginning inventory is 3,000 units. The desired ending inventory is 30% higher than the beginning inventory. How many units should Raider-X purchase in April?

Short Answer

Expert verified

The total number of units purchased by Raider-X for the month of April is18,900 units.

Step by step solution

01

Following information is given in the question

The forecasted sales for the month of April are 18,000 units

Beginning inventory is 3,000 units

Desired ending inventory is 30% higher than the beginning inventory

02

Calculation of number of units purchased in April

Raider-X Company
Purchases budget
For the month of April
Particulars	Amount (in units)
Budgeted ending inventory	3,900
Add: Budgeted sales	18,000
Required units	21,900
Less: Beginning inventory	3,000
Number of units to be purchased	18,900

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Most popular questions from this chapter

Ramos Co. provides the following sales forecast and production budget for the next four months:

The company plans for finished goods inventory of 120 units at the end of June. In addition, each finished unit requires 5 pounds of direct materials and the company wants to end each month with direct materials inventory equal to 30% of next month’s production needs. Beginning direct materials inventory for April was 663 pounds. Direct materials cost \(2 per pound. Each finished unit requires 0.50 hours of direct labor at the rate of \)16 per hour. The company budgets variable overhead at the rate of \(20 per direct labor hour and budgets fixed overhead of \)8,000 per month. Prepare a direct materials budget for April, May, and June.

For each of the following items 1 through 6, indicate yes if it describes a potential benefit of budgeting or no if it describes a potential negative outcome of budgeting.

4. Some employees might overstate expenses in budgets

Walker Company prepares monthly budgets. The current budget plans for a September ending merchandise inventory of 30,000 units. Company policy is to end each month with merchandise inventory equal to 15% of budgeted sales for the following month. Budgeted sales and merchandise purchases for the next three months follow. The company budgets sales of 200,000 units in October. Prepare the merchandise purchases budgets for the months of July, August, and September.

Refer to Exercise 20-8. Prepare (1) a direct labor budget

Coca-Cola recently redesigned its bottle to reduce its use of glass, thus lowering its bottle’s weight and CO2 emissions. Which budgets in the company’s master budget will this redesign impact?

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