Answer:
The purchase of raw materials for the month of February which is budgeted is 18,400
Explanation:
Computing the purchase of raw materials for the month of February which is budgeted is as:
Raw material required to meet the production = Needed production in units × Raw materials needed per unit
where
Needed production in units 19,000
Raw materials needed per unit is 1 pound
Putting the values above:
= 19,000 × 1
= 19,000
Computing total raw materials required as:
Total raw materials required = Raw material required to meet the production + Desired ending raw material inventory
where
Raw material required to meet the production is 19,000
Desired ending raw material inventory = 16,000 × 1 × 20%
= 3,200
So,
Total raw materials required = 19,000 + 3,200
= 22,200
Computing raw material to be purchased is as:
Raw material to be purchased = Total raw materials required - Beginning raw materials inventory
where
Total raw materials required is 22,200
Beginning raw materials inventory = 19,000 × 1 × 20%
= 3,800
So,
= 22,200 - 3,800
Raw material to be purchased = 18,400
