Answer:
$133,704
Explanation:
The budgeted required production for August is computed as follows:
Budgeted sales in units 9,000
Add desired ending inventory 5,560
(September sales of 13,900 units × 40%
= 5,560 units)
Total needs 14,560
Less beginning inventory 3,600
(August sales of 9,000 units × 40%
= 3,600 units.)
Required production 10,960
The budgeted raw material purchases for August are computed as follows:
Required production in units of finished goods 10,960
Units of raw materials needed per unit of finished goods 6
Units of raw materials needed to meet production(10,960×6) 65,760
Add desired units of ending raw materials inventory 7,688
(76,680 pounds × 10% = 7,668 pounds)
Total units of raw materials needed 73,428
Less units of beginning raw materials inventory 6,526
( 65,760 pounds × 10% = 6,576 pounds)
Units of raw materials to be purchased 66,852
The budgeted cost of raw material purchases for August is computed as follows:
Units of raw materials to be purchased (a)$66,852
Unit cost of raw materials (b)$2.00
Cost of raw materials to be purchased (a) × (b)$133,704
