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Homework answers / question archive / Company has budgeted production for next year as follows: Quarter Production in units First Second Third Fourth 10,000 12,000 16
Company has budgeted production for next year as follows: Quarter Production in units First Second Third Fourth 10,000 12,000 16.000 14,000 Four kilograms of raw materials are required for each unit produced. Raw materials on hand at the start the year total 4.000 fotograms. The raw materials Inventory at the end of each quarter should equal 10% of the next quarter's production needs Budgeted purchases of raw materials in Kilograms in the third quarter will be
Multiple Choice 63,200. O 56,800 50.400 ? O 62,400
Correct option is 63,200
Explanation -
| Quarterly Budget | First | Second | Third | Fourth |
| Opening Raw material (a) | 4,000 | 4,800 | 6,400 | 5,600 |
| Production in units (b) | 10,000 | 12,000 | 16,000 | 14,000 |
| Requirement (c = 4 * b) | 40,000 | 48,000 | 64,000 | 56,000 |
| Purchase of Raw material in Kgs (d = c + d - a) | 40,800 | 49,600 | 63,200 | 50,400 |
| Closing (d = Next quarter production * 4 * 10%) | 4,800 | 6,400 | 5,600 | - |
