Planton Manufacturing plans to produce 25,000 units, 29,000 units, and 35,000 units, respectively, in October,...
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Planton Manufacturing plans to produce 25,000 units, 29,000 units, and 35,000 units, respectively, in October, November, and December. Each of these units requires three units of part no. 879, which the company can purchase for $7 each. Planton has 40,000 units of part no. 879 in stock on September 30. Required: Prepare a direct-material purchases budget for October and November in units and dollars. Management desires to maintain an ending raw-material inventory equal to 30% of the following month's production usage.
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