The Tobler Company has budgeted production for next year as follows: Quarter Production in Units First 10,000 Second 12,000 Third 16,000 Fourth 14,000 Four kilograms of raw materials are required for each unit produced. At the start of the year, raw materials on hand total 4,000 kilograms. The raw materials inventory at the end of each quarter should equal 10% of the next quarter’s production needs. What would be the budgeted purchases of raw materials in the third quarter?
a) 50,400 kilograms. b) 56,800 kilograms. c) 62,400 kilograms. d) 63,200 kilograms.
Darshita Changed status to publish July 24, 2020
Answer:
Budgeted purchase =63,200
Explaination to the above answer
| third | fourth | |
| production in units | 16000 | 14000 |
| kg per unit required | 4 | 4 |
| total kg required | 64000 | 56000 |
| add ending inventory | 5600 | |
| total. | 69600 | |
| less beginning inventory | -6400 | |
| total purchases | 63200 |
Darshita Changed status to publish July 24, 2020
