Steve Manufactures Picture Frames

Essay

Steve manufactures picture frames. Sales for July are expected to be 10,000 units of various sizes. Historically, the average frame requires five foot of framing, one square foot of glass, and one square feet of backing. Beginning inventory includes 7,000 feet of framing, 1,500 square feet of glass, and 2,500 square feet of backing. Current prices are £0.90 per foot of framing, £4.50 per square foot of glass, and £1.50 per square foot of backing. Ending inventory should be 150 per cent of beginning inventory. Purchases are paid for in the month acquired.
Required:
a.
Determine the quantity of framing, glass, and backing that is to be purchased during July.
b.
Determine the total amount of cash needed for July purchases.