A sporting goods manufacturer budgets production of 45,000 pairs of ski boots in the first quarter and 30,000 pairs in the second quarter of the upcoming year.Each pair of boots requires 2 kilograms (kg)of a key raw material.The company aims to end each quarter with ending raw materials inventory equal to 20% of the following quarter's material needs.Beginning inventory for this material is 18,000 kg and the cost per kg is $8.What is the budgeted materials needed in kg.in the first quarter?

Question

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For the first quarter, the company plans to produce 45,000 pairs of ski boots, each requiring 2 kg of raw material, totaling 90,000 kg. To meet the goal of ending the quarter with inventory equal to 20% of the next quarter's needs (30,000 pairs * 2 kg/pair = 60,000 kg), they need an additional 12,000 kg (20% of 60,000 kg). Therefore, the total material needed is 90,000 kg for production plus 12,000 kg for ending inventory, totaling 102,000 kg. Subtracting the beginning inventory of 18,000 kg, the budgeted materials needed for purchase in the first quarter is 84,000 kg.

A Sporting Goods Manufacturer Budgets Production of 45,000 Pairs of Ski