Zhang Industries budgets production of 300 units in June and 310 units in July. Each finished unit requires 4 pounds (lbs.) of raw material K, which costs $5 per pound. Each month's ending inventory of raw materials should be 30% of the following month's budgeted production. The June 1 raw materials inventory has 360 pounds of raw material K. Compute budgeted purchases for raw material K in pounds for June.
A) 880 lbs.
B) 1,212 lbs.
C) 1,200 lbs.
D) 1,220 lbs.
E) 1,240 lbs.

Question

Quizplus · Accepted Answer

The Answer of Zhang Industries budgets production of 300 units in June and 310 units in July. Each finished unit requires 4 pounds (lbs.) of raw material K, which costs $5 per pound. Each month's ending inventory of raw materials should be 30% of the following month's budgeted production. The June 1 raw materials inventory has 360 pounds of raw material K. Compute budgeted purchases for raw material K in pounds for June.
A) 880 lbs.
B) 1,212 lbs.
C) 1,200 lbs.
D) 1,220 lbs.
E) 1,240 lbs.

Zhang Industries Budgets Production of 300 Units in June and 310