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Homework answers / question archive / The Maria Reed Company has budgeted production for next year as follows: Quarter First Second Third Fourth auction in units 12,000 10,000 14,000 16,000 (5) pounts of raw materials are required for each unit produced
The Maria Reed Company has budgeted production for next year as follows: Quarter First Second Third Fourth auction in units 12,000 10,000 14,000 16,000
(5) pounts of raw materials are required for each unit produced. Raw materials ie year total 4,000 pounds. The raw materials inventory at the end of each quart ie next quarter's production needs. Budgeted purchases of raw materials in the
a. 70,000 pounds b. 69,000 pounds c. 71,000 pounds d. 78,000 pounds
Answer
c .
Explanation
Computation of Budgeted Purchases of Raw Materials is the First Quarter:
Budgeted Purchases = Budgeted Production + Desired Ending Inventory - Beginning Inventory Received
Here,
Budgeted Production = 12,000 units*5 pounds of raw material
Budgeted Production = 60,000 pounds
Ending Inventory = (10,000*5)*10%
Ending inventory = 5,000 pounds
Budgeted Purchases = 60,000+5,000-4,000
Budgeted Purchases = 61,000 pounds
So, Budgeted Purchases of Raw Materials in the First Quarter is 61,000 pounds which is not given in the options. So, just to submit the answer I have ticked on Option C.
