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Homework answers / question archive / The following is the budgeted information for July Estimated beginning inventory of raw material 20,000 pounds Desired ending inventory of raw material 40,000 pounds Required pounds of raw material needed for production 120,000 pounds How many pounds of raw material should be purchased in July? Multiple Choice 140,000 pounds
The following is the budgeted information for July Estimated beginning inventory of raw material 20,000 pounds Desired ending inventory of raw material 40,000 pounds Required pounds of raw material needed for production 120,000 pounds How many pounds of raw material should be purchased in July? Multiple Choice 140,000 pounds
The company is required to have raw material sufficient enough to fufill the needs of production as well as the closing inventory requirement. The purchase requirement is reduced by the beginning inventory already present in the hands of the company. Thus the Raw materials to be purchased for the month of July are as follows:
Raw material required for production | 120,000 | pounds |
Add: Desired ending inventory | 40,000 | pounds |
Less: Estimated beginning inventory | 20,000 | pounds |
Raw material to be purchased | 140,000 | pounds |