A firm that manufactures vases has budgeted production for the next four months as follows: $$\begin{array} { l r }
& \text { Units Produced } \
\text { October } & 40,000 \
\text { November } & 50,000 \
\text { December } & 30,000 \
\text { January } & 40,000
\end{array}$$ Each vase requires 30 grams of silica. The managers desire an ending inventory sufficient to meet 25% of the next month's production. There is no beginning inventory of raw material in October.
Budgeted purchases of silica in grams for November would be:
A) 450,000
B) 1,650,000
C) 1,350,000
D) 900,000

Question

A firm that manufactures vases has budgeted production for the next four months as follows: $$\begin{array} { l r } 
& \text { Units Produced } \
\text { October } & 40,000 \
\text { November } & 50,000 \
\text { December } & 30,000 \
\text { January } & 40,000
\end{array}$$ Each vase requires 30 grams of silica. The managers desire an ending inventory sufficient to meet 25% of the next month's production. There is no beginning inventory of raw material in October.
Budgeted purchases of silica in grams for November would be:
A) 450,000
B) 1,650,000
C) 1,350,000
D) 900,000

Quizplus · Accepted Answer

To determine the budgeted purchases of silica in grams for November, we need to first calculate the total amount of silica needed for production in November and the desired ending inventory of silica at the end of November.

Total silica needed for production in November:
(15,000 + 18,000 + 20,000) x 30 grams = 1,530,000 grams

Desired ending inventory of silica at the end of November:
25% of December's production = 25% x 22,000 x 30 grams = 165,000 grams

Total silica needed in November:
1,530,000 + 165,000 = 1,695,000 grams

Since there is no beginning inventory of silica in October, the entire 1,695,000 grams of silica needed for November must be purchased. Therefore, the budgeted purchases of silica in grams for November would be 1,695,000 grams, which is closest to choice C) 1,350,000.

A Firm That Manufactures Vases Has Budgeted Production for the Next