Charm Enterprises' production budget shows the following units to be produced for the coming three months: $\begin{array} { | l | r | r | r | }
\hline & \text { April } & \text { May } & \text { June } \
\hline \text { Units to be produced } & 2,560 & 2,880 & 2,760 \
\hline
\end{array}$
A finished unit requires four ounces of a key direct material. The March 31 Raw Materials Inventory has 4,032 ounces (oz.) of the material. Each month's ending Raw Materials Inventory should be 35% of the following month's production needs. The materials to be purchased during May should be:

Question

Charm Enterprises' production budget shows the following units to be produced for the coming three months: $\begin{array} { | l | r | r | r | } 
\hline & \text { April } & \text { May } & \text { June } \
\hline \text { Units to be produced } & 2,560 & 2,880 & 2,760 \
\hline
\end{array}$
A finished unit requires four ounces of a key direct material. The March 31 Raw Materials Inventory has 4,032 ounces (oz.) of the material. Each month's ending Raw Materials Inventory should be 35% of the following month's production needs. The materials to be purchased during May should be:

Quizplus · Accepted Answer

The correct answer is A because the materials to be purchased during May should be 11,352 oz. This is calculated as follows:May production needs = 2,880 units x 4 ounces per unit = 11,520 ouncesLess: March 31 Raw Materials Inventory = 4,032 ouncesAdd: Desired ending Raw Materials Inventory (35% of June production needs) = 2,760 ounces x 35% = 966 ouncesMaterials to be purchased during May = 11,520 ounces - 4,032 ounces + 966 ounces = 11,352 ounces

Charm Enterprises' Production Budget Shows the Following Units to Be