Question

Marst Corporation's budgeted production in units and budgeted raw materials purchases over the next three months are given below: January February March Budgeted production (in units) 94,000 ? 80,000 Budgeted raw materials purchases (in pounds) 213,800 239,800 295,800 Two pounds of raw materials are required to produce one unit of product. The company wants raw materials on hand at the end of each month equal to 30% of the following month's production needs. The company is expected to have 26,000 pounds of raw materials on hand on January 1. Budgeted production for February should be: rev: 10_27_2016_QC_CS-67319 191,800 units 48,000 units 96,000 units 137,000 units

Answer 1

Answer:

137,000

Explanation:

                                Jan          Feb              March

Units produced     94000                         80000

Raw materials         26,000

Raw materials       213800    239800   295800

Ratio of raw material to a product is 2:1

Ending inventory = 30% of next month production

Represent budgeted production in February by F

239800=2F + (80000*2*30%)-(2F*30%)

239800 = 2F +48000 =0.6F

239800-48000=2F-0.6F

191800=1.4F

F= 191800/1.4 =137000