Question

The following are budgeted data: January February March Sales in units 16,800 23,600 19,800 Production in...

The following are budgeted data:

January February March
Sales in units 16,800 23,600 19,800
Production in units 19,800 20,800 19,700

One pound of material is required for each finished unit. The inventory of materials at the end of each month should equal 20% of the following month's production needs. Purchases of raw materials for February would be budgeted to be:

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Answer #1

Budgeted material purchase for February = 20,580 units

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For the Month from January through March
January February March
Budgeted production (units) 19800 20800 19700
Materials requirements per unit 1 1 1
Materials needed for production (pounds) 19800 20800 19700
Budgeted ending inventory (pounds) 4160 3940 Not needed
Total materials requirements (pounds) 23960 24740 19700
Beginning inventory (pounds) Not needed 4160 3940
Materials to be purchased (pounds) 23960 20580 15760
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