Question

Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.

	Beginning Inventory	Ending Inventory
Finished goods (units)	27,000	37,000
Raw material (grams)	57,000	47,000

Each unit of finished goods requires 2 grams of raw material. The company plans to sell 220,000 units during the year.

How much of the raw material should the company purchase during the year?

Answer 1

Ans:450,000 Grams Explanation: The Company Expected to sell-220,000 units Required production units=Sales units + Ending units of finished goods -Beginning Finished Goods =220,000+37,000-27,000 =230,000 Required Raw Materials for the year=Expected number of Units required to produce X Number of raw materials required for one unit of finished good production =230,000*2=460,000 Grams Raw Material Required to Purchase during the Year=Raw Material Required for Production+ Ending Raw Materials -Beginning Raw Materials =460,000+47,000-57,000=450,000 Grams Hope This Helped ! Let Me Know In Case of Any Queries