Hesterman Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations: Budgeted selling price per unit $ 118 Budgeted unit sales (all on credit):     April   7,800 May   9,400 June   14,000 July   12,100 Raw materials requirement per unit of output   3 pounds Raw materials cost $ 3.00 per pound Direct labor requirement per unit of output   2.8 direct labor-hours Direct labor wage rate $ 25.00 per direct labor-hour Credit sales are collected: 40% in the month of the sale 60% in the following month   The ending finished goods inventory should equal 40% of the following month's sales. The ending raw materials inventory should equal 20% of the following month’s raw materials production needs.   If 39,720 pounds of raw materials are required for production in June, then the budgeted cost of raw material purchases for May is closest to:

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 11CE: Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted...
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Hesterman Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations:

Budgeted selling price per unit $ 118
Budgeted unit sales (all on credit):    
April   7,800
May   9,400
June   14,000
July   12,100
Raw materials requirement per unit of output   3 pounds
Raw materials cost $ 3.00 per pound
Direct labor requirement per unit of output   2.8 direct labor-hours
Direct labor wage rate $ 25.00 per direct labor-hour

Credit sales are collected:

40% in the month of the sale

60% in the following month

 

The ending finished goods inventory should equal 40% of the following month's sales. The ending raw materials inventory should equal 20% of the following month’s raw materials production needs.

 

If 39,720 pounds of raw materials are required for production in June, then the budgeted cost of raw material purchases for May is closest to:

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