Question

8. Masterson Company's budgeted production calls for 56,000 liters in April and 52,000 liters in May of a key raw material that costs $2.85 per liter. Each month's ending raw materials inventory should equal 35% of the following month's budgeted materials. The April 1 inventory for this material is 16,800 liters. What is the budgeted materials need in liters for April?

Answer 1

Answer:

54,600

Explanation:

According to the scenario, computation of the given data are as follow:-

Particular                          Quantity of Raw Material (liters)

Required Raw Material                                   56,000

Add-Raw Material’s ending stock (52,000 × 35%) 18,200

Less-Raw Material’s opening stock(56,000 × 35%) 19,600

Budgeted material need for April                                 54,600

We simply applied the above format for determining the budgeted material needed for the month of April