The following are budgeted data sales units production units...

The following are budgeted data Sales (units) Production (units) April 15,000 18,000 May 20,000 19,000 June 18,000 16,000 Two pounds of material are required for each finished unit. The inventory of materials at the end of each month should equal 20% of the following month's production needs. Purchases of raw materials for May should be: Question 17 options: 1) 39,200 pounds 2) 52,000 pounds 3) 36,800 pounds 4) 38,000 pounds

Transcript

00:01 The given question we have to find out the quantity of raw material purchased for that we will be doing preparing a first of all a format or a statement we can say this will be particulars this is month of april this is may and june now in the question it is given that production for different months were in units in the month of april it was 18 ,000 unit 19 ,000 for may and 16 ,000 for june now it is said that raw material required at the rate two ounces per unit means one unit of final product requires two ounce of matter so for the month of april for producing 18 ,000 units raw material required will be 18 ,000 into two that means 36 ,000 we can do the workings here for april it will be 18 ,000 into two ounces that gives us 36 ,000 for the month of may it will be 19 ,000 two ounces each so this will give us 38 ,000 and for the month of june it will be 16 ,000 with two ounces each that gives us 32 ,000 and this will be ounces so this will be 38 ,000 and this will be 32 ,000 so this is the data that we have now we will be finding out the closing inventory of raw material for different months it is said that the closing inventory of the current month will be 20 % of the next month raw material used in producing the unit.

02:35 So for the month of april, its closing inventory will be dependent on may months raw material requirement for production and that was 38 ,000 ounces.

02:48 So its 20 % is going to be the closing inventory of april.

02:53 So this comes to 7 ,600 ounces.

02:57 So 7 ,600 ounces will be the closing inventory.

03:02 For the month of april.

03:04 Similarly for the month of may the closing inventory will be dependent on the raw metal required for the producing 16 ,000 units and that is 32 ,000 we have already calculated so 20 % of 32 ,000 ounces and that comes to 6 ,400 so 6400.

03:27 We don't have any data so we can't conclude the month of june's requirement...

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