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Managerial Accounting of Sarter Corporation

Sarter Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.

Beginning Inventory Ending Inventory
Finished goods (units) 70,000 20,000
Raw material (grams) 50,000 60,000

Each unit of finished goods requires 3 grams of raw material.
Reference: 9-4

How much of the raw material should the company purchase during the year?

2,550,000 grams
2,480,000 grams
2,490,000 grams
2,500,000 grams

Solution Preview

Sarter Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.

Beginning Inventory Ending Inventory
Finished goods (units) 70,000 20,000
Raw material (grams) 50,000 60,000

Each unit of finished goods requires 3 grams of raw material.
Reference: 9-4

How ...

Solution Summary

Solution contain calculation of number of units or a product that must be purchased from the supplier during the month when expected sales ,ending inventory and beginning inventory in units are given.

$2.19