Marst Corporation's budgeted production in units and budgeted raw materials purchases over the next three months are given below: Two pounds of raw materials are required to produce one unit of product. The company wants raw materials on hand at the end of each month equal to 30% of the following month's production needs. The company is expected to have 42,000 pounds of raw materials on hand on January 1. Budgeted production for February should be:

Question

Marst Corporation's budgeted production in units and budgeted raw materials purchases over the next three months are given below:  Two pounds of raw materials are required to produce one unit of product. The company wants raw materials on hand at the end of each month equal to 30% of the following month's production needs. The company is expected to have 42,000 pounds of raw materials on hand on January 1. Budgeted production for February should be:

Quizplus · Accepted Answer

Direct Materials Budget
 11eacbfc_c5d5_787a_8ffe_29601be1e852_TB7552_00 151,600 = 48,000 + 2X - 0.6X
1.4X = 103,600
X = 74,000

Marst Corporation's Budgeted Production in Units and Budgeted Raw Materials