The Tobler Company had budgeted production for the year as follows: Four pounds of raw materials are required for each unit produced.Raw materials on hand at the start of the year total 4,000 lbs.The raw materials inventory at the end of each quarter should equal 10% of the next quarter's production needs in materials.Budgeted purchases of raw materials in the third quarter would be (in lbs.)

Question

Quizplus · Accepted Answer

To calculate the budgeted purchases of raw materials for the third quarter, we need to determine the production needs and adjust for the desired ending inventory. First, calculate the production needs for the third quarter and the fourth quarter (as the ending inventory for the third quarter is based on the fourth quarter's needs). Then, adjust for the beginning inventory and the desired ending inventory to find the purchases needed.

The Tobler Company Had Budgeted Production for the Year as Follows