Question

The following are budgeted data: January February March Sales in units 15,900 21,800 18,900 Production in units 18,900 19,900 17,900 One pound of material is required for each finished unit. The inventory of materials at the end of each month should equal 20% of the following month's production needs. Purchases of raw materials for February would be budgeted to be:

Answer 1

Answer:

20,300 pounds

Explanation:

Purchases Budget for February - Pounds

Material required in Production                                              19,900

Add Opening Materials Inventory (19,900 x 20%)                  3,980

Total                                                                                         23,880

Less Closing Materials Inventory (17,900 x 20%)                 (3,580)

Budgeted Purchases                                                              20,300

Therefore,

Purchases of raw materials for February would be budgeted to be 20,300 pounds