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    Required production, Raw material purchases

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    Bodin Company budgets on an annual basis. The following beginning and ending inventory levels (in units) are plannned for the year 20x1. One units of raw material are required to produce each unit of finished product.

    January 1 December 31
    Raw material 37,000 48,000
    Work in process 13,000 13,000
    Finished goods 81,000 54,000

    If Bodin Company plans to sell 476,000 units during the year, compute the number of units the firm would have to manufacture during the year.

    Required production

    If 520,000 finished units were to be manufactured by Bodin Company during the year, determine the amount of raw material to be purchased.

    Raw-material purchases

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    Solution Preview

    Solution 1.

    Required Production = Sales units + closing bal - opening bal.

    = ...

    Solution Summary

    The solution computes Required production, Raw material purchases for Bodin Co.