Big Company manufactures keyboards.Management wishes to develop budgets for the upcoming quarter based on the following data: $\begin{array}{ll}
\text { Sales in units } & 800 \text { units } \
\text { Selling price per unit } & \$ 60 \
\text { Inventory at beginning of the quarter }(F G) & 80 \text { units } \
\text { Desired ending inventory }(F G) & 130 \text { units } \
\text { Direct materials per unit: } & 4 \text { ounces plastic } \
\text { Plastic inventory at beginning of quarter } & 136 \text { ounces } \
\text { Desired ending inventory of plastic } & 84 \text { ounces } \
\text { Plastic cost } & \$ .18 \text { per ounce }
\end{array}$ Compute the budgeted quantity of plastic that needs to be purchased for the next quarter.

Question

Quizplus · Accepted Answer

First, we need to calculate the amount of plastic needed for production during the quarter based on the number of units produced:

800 units × 4 ounces per unit = 3,200 ounces of plastic needed

Next, we need to determine the total amount of plastic required for the quarter, including both production and desired ending inventory:

Plastic needed for production + desired ending inventory - beginning inventory = total plastic required

3,200 ounces + 84 ounces - 136 ounces = 3,148 ounces

Finally, we need to calculate the amount of plastic that needs to be purchased:

Total plastic required - beginning inventory = plastic to be purchased

3,148 ounces - 136 ounces = 3,012 ounces

Therefore, the budgeted quantity of plastic that needs to be purchased for the next quarter is 3,348 ounces.

Big Company Manufactures Keyboards Compute the Budgeted Quantity of Plastic That Needs to Be