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Purchase of raw material

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Budgeted data:

Jan Feb Mar
sales in units 15,000 20000 18000
Production units 18000 19000 16000

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 should be

a 19600 pounds
b 20,400 pounds
c 18,400 pounds
d 18,600 pounds

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Solution Summary

The solution explains how to calculate the quantity of raw materila that should be purchased.

Solution Preview

Purchases = Production + ending inventory - beginning inventory
Production ...

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