Coles Corporation, Inc

question 129

Multiple Choice

Coles Corporation, Inc. makes and sells a single product, Product R. Three yards of Material K are needed to make one unit of Product R. Budgeted production of Product R for the next five months is as follows: The company wants to maintain monthly ending inventories of Material K equal to 20% of the following month's production needs. On July 31, this requirement was not met since only 2,500 yards of Material K were on hand. The cost of Material K is $0.85 per yard. The company wants to prepare a Direct Materials Purchase Budget for the rest of the year.
The total needs (i.e., production requirements plus desired ending inventory) of Material K for November are:

• A) 37,800 yards
• B) 44,940 yards
• C) 37,380 yards
• D) 45,360 yards

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