Peoria Manufacturing, Inc., has budgeted production for June of 6,000 units and for July of 8,000 units.Each unit produced requires 4 pounds of raw material A.Peoria's beginning inventory of raw material A in June is 4,800 pounds and Peoria requires 20% of the next month's budgeted production as ending raw material inventory each month.The number of pounds of raw material A budgeted to be purchased in June is:

Question

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To calculate the pounds of raw material A to be purchased in June, first determine the total raw material needed for June's production: 6,000 units * 4 pounds/unit = 24,000 pounds. Next, calculate the desired ending inventory for June, which is 20% of July's production needs: 8,000 units * 4 pounds/unit * 20% = 6,400 pounds. The total raw material requirement for June is the sum of production needs and desired ending inventory: 24,000 + 6,400 = 30,400 pounds. Subtract the beginning inventory: 30,400 - 4,800 = 25,600 pounds to be purchased.