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Manufacturing and Budgeting

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

January 1 December 31
Raw material 35,000 45,000
Work in process 12,000 12,000
Finished goods 80,000 50,000

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Required:
1. If Bodin Company plans to sell 480,000 units during the year, compute the number of units the firm would have to manufacture during the year.

Required production ????

2. If 500,000 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

question 1 & 2
Bodin Company budgets on an annual basis. The following beginning and ending inventory levels (in units) are planned for the year 20x1. Two units of raw material are required to produce each unit of finished product.

January 1 December 31
Raw material 35,000 45,000
Work in process 12,000 12,000
Finished goods 80,000 ...

Solution Summary

Use of manufacturing data and budgeting data to determine the number of units the firm would have to manufacture; amount of raw material to be purchased

$2.19