Question

Cliff Co.’s budgeted sales for the month of April are 18034 units. The company has 5092...

Cliff Co.’s budgeted sales for the month of April are 18034 units. The company has 5092 units on hand in opening inventory and would like to have 13698 units on hand at April 30.

Each unit requires 3 kg of raw material. The opening and targeted ending raw material inventory for the month of April is 31098 kg and 44729 kg, respectively.

How many kg of raw material must Cliff Co. purchase for the month of April?

Select one:

a. 93551

b. 14653

c. 67733

d. 40271

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Answer #1

Answer- Raw material must Cliff Co. purchase for the month of April = 93551 Kg.

Explanation-

CLIFF CO.
Raw Material Budget
For the Month of April
Particluars April Month
Budgeted production in units (a) 26640
Kg of Raw material required per unit (b) 3 Kg.
Raw material required for production kg (c=a*b) 79920
Add:- Desired ending inventory 44729 kg
Less:= Opening inventory 31098 kg
Budgeted Raw material purchase (Kg.) 93551

Where- Budgeted production units of April month = Budgeted sales units+ Ending finished goods inventory – Opening finished goods inventory

= 18034 units+13698 units-5092 units

= 26640 units

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