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Determine the amount of direct materials to be purchased

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BSAD Corporation's production budget calls for the following number of units to be produced each quarter for next year:

Budgeted production

Quarter 1 45000 units
Quarter 2 38000 units
Quarter 3 34000 units
Quarter 4 48000 units

Each unit of product requires 3 pounds of direct material. The company's policy is to begin each quarter with an inventory of direct materials equal to 30% of that quarter's direct material requirements.

Determine the amount of direct materials to be purchased in the 3rd and 4th quarters.

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The solution determines the amount of direct materials to be purchased by BSAD Corporation.

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