Answer (C) is correct . The calculation of pounds of raw material needed to be purchased is as follows: ? Budgeted unit sales 2,000 Add:? required finished goods ending inventory 325 Less:? beginning finished goods inventory (250) Required production 2,075 Times:? pounds per unit ¡Á?????4 Pounds required for production 8,300 Add:? target ending raw materials inventory 800 Less:? beginning raw materials inventory (400) Pounds to be purchased 8,700Answer (A) is incorrect because The figure of 2,475 results from using unit sales rather than pounds of raw material.
Answer (B) is incorrect because The figure of 7,900 results from failing to account for the 800 pounds of target ending raw materials inventory.
Answer (D) is incorrect because The figure of 9,300 results from reversing the finished goods beginning and ending inventories.
|
How many pounds of materials must be purchased?
