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
 11ea7761_17a9_d343_81a5_ad9dafec11a5_TB2580_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