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 30, 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 30, 000 pounds of raw materials on hand on January 1.Budgeted production for February should be:

Quizplus · Accepted Answer

Direct Materials Budget
 11eaa0c8_94e5_2566_9cb2_1d274e68edb5_TB2487_00 132, 000 = 48, 000 + 2X - 0.6X
1.4X = 84, 000
X = 60, 000

Marst Corporation's Budgeted Production in Units and Budgeted Raw Materials