Marple Company's budgeted production in units and budgeted raw materials purchase? over the next three months are given below: $$\begin{array} { | c | l | l | l | }
\hline & \text { January } & \text { February } & \text { March } \
\hline \text { Budgeted production (in units) } & 60,000 & ? & 100,000 \
\hline \text { Budgeted raw materials } & & & \
\hline \text { purchases (in kilograms) } & 129,000 & 165,000 & 188,000 \
\hline
\end{array}$$ Two kilograms 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 36,000 kilograms of raw materials on hand on January 1. Budgeted production in units for February will be?

Question

Marple Company's budgeted production in units and budgeted raw materials purchase? over the next three months are given below: $$\begin{array} { | c | l | l | l | } 
\hline & \text { January } & \text { February } & \text { March } \
\hline \text { Budgeted production (in units) } & 60,000 & ? & 100,000 \
\hline \text { Budgeted raw materials } & & & \
\hline \text { purchases (in kilograms) } & 129,000 & 165,000 & 188,000 \
\hline
\end{array}$$ Two kilograms 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 36,000 kilograms of raw materials on hand on January 1. Budgeted production in units for February will be?

Quizplus · Accepted Answer

To find the budgeted production for February, we need to understand the relationship between the production in units and the raw materials required. Since 2 kilograms of raw materials are needed to produce one unit of product, we can use the information about raw materials to backtrack the production numbers.For January:- The company starts with 36,000 kilograms of raw materials.- They purchase an additional 129,000 kilograms, totaling 165,000 kilograms available for use.- They want to have 30% of February's production needs in raw materials at the end of January. Since 2 kilograms are needed per unit, this is 30% of February's production * 2.For February:- The raw materials purchase for February is 165,000 kilograms.- They want to have 30% of March's production needs (100,000 units * 2 kilograms/unit = 200,000 kilograms) as ending inventory, which is 60,000 kilograms (30% of 200,000).To calculate February's production in units:1. Calculate the total raw materials needed for February, including the ending inventory for March. This is 165,000 kilograms (February purchase) + 60,000 kilograms (30% of March's needs) = 225,000 kilograms.2. Subtract January's ending inventory, which is also February's beginning inventory (30% of February's production needs). We find this by setting up the equation: 165,000 kilograms (total available for January) - 129,000 kilograms (used in January) = 36,000 kilograms (beginning inventory for February), which is also 30% of February's production needs in kilograms. This means February's beginning inventory was intended to be 36,000 kilograms.3. The total raw materials available for February's production is the February purchase plus January's ending inventory: 165,000 + 36,000 = 201,000 kilograms.4. Since we know they actually need 225,000 kilograms (step 1) to meet February's production and ending inventory for March, and since 36,000 kilograms is 30% of February's production needs, we can calculate February's total raw material requirement for production (excluding the ending inventory for March) as 165,000 kilograms.5. Given 2 kilograms per unit, February's production in units is 165,000 kilograms / 2 = 82,500 units. However, considering the mistake in calculation regarding the total raw materials needed and the actual calculation process, the correct approach involves directly calculating the production units for February based on the given and derived data.Correcting the approach:- To find February's production, we need to ensure the calculation accounts for the raw materials used in February and the ending inventory for March correctly. The mistake was in the interpretation of how the ending inventory and production needs relate to the raw materials purchased and on hand.Given the error in the step-by-step explanation, the correct calculation should directly relate the raw materials needed for February's production and the desired ending inventory for March, considering the 2 kilograms per unit production requirement. However, without the correct step-by-step calculation aligning with the provided choices, the intended correct answer choice based on the initial setup and explanation was D) 75,000, assuming a direct calculation mistake was acknowledged.

Marple Company's Budgeted Production in Units and Budgeted Raw Materials