The following budgeted information is provided:
$$\begin{array} { | l | c | c | c | }
\hline \text { Month } & \mathbf { 1 } & \mathbf { 2 } & \mathbf { 3 } \
\hline \text { Sales in units } & 15,000 & 20,000 & 18,000 \
\hline \text { Production in units } & 16,000 & 22,000 & 15,000 \
\hline
\end{array}$$One pound of material is required for each finished unit.The inventory of materials at the end of each month should equal 20% of the following month's production needs.At the beginning of Month 1,there was 3,200 lbs.of materials on hand.Purchases of raw materials for Month 1 would be (in pounds):

Question

The following budgeted information is provided: 
$$\begin{array} { | l | c | c | c | } 
\hline \text { Month } & \mathbf { 1 } & \mathbf { 2 } & \mathbf { 3 } \
\hline \text { Sales in units } & 15,000 & 20,000 & 18,000 \
\hline \text { Production in units } & 16,000 & 22,000 & 15,000 \
\hline
\end{array}$$One pound of material is required for each finished unit.The inventory of materials at the end of each month should equal 20% of the following month's production needs.At the beginning of Month 1,there was 3,200 lbs.of materials on hand.Purchases of raw materials for Month 1 would be (in pounds):

Quizplus · Accepted Answer

The production for Month 2 is 22,000 units, requiring 22,000 lbs of materials. The ending inventory for Month 1 should be 20% of Month 2's production needs, which is 4,400 lbs (20% of 22,000). The beginning inventory for Month 1 is 3,200 lbs. The production for Month 1 requires 16,000 lbs. Therefore, the purchases for Month 1 are calculated as: (16,000 + 4,400) - 3,200 = 17,200 lbs.

The Following Budgeted Information Is Provided One Pound of Material Is Required for Each Finished Unit