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Splash LLC Company has the following information for next month: Planned sales of 28,000 units and...

Splash LLC Company has the following information for next month: Planned sales of 28,000 units and planned production of 25,000 units which require 3 gallons of Material A each; beginning inventory of Material A of 4,400 gallons; desired ending inventory of Material A of 5,400 gallons. How much material A needs to be purchased? 76,000 gallons 85,000 gallons 74,000 gallons 75,000 gallons

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Answer #1
Planned Production (units )      25,000
x Material A required per unit                3
Material A required for Planned production ( in Gallons )     75,000
Add: Desired ending inventory of Material A        5,400
Less: Beginning Inventory of material A        4,400
Material A needs to be purchased     76,000
Correct answer is option 1 ( i.e. 76,000 gallons ).
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