Question

B MC Qu. 20-87 Masterson Companys budgeted production... Masterson Company's budgeted production calls for 69,000 units in April and 65,000 units in May of a key raw material that costs $1.75 per unit. Each month's ending raw materials inventory should equal 30% of the following month's budgeted materials. The April 1 inventory for this material is 20,700 unit. What is the budgeted materials needed in units for April

Answer 1

67,800 units

Step-by-step explanation:

Given the information above,

The budgeted production for April = 69,000 units

The budgeted production for May = 65,000 units

The cost of raw material per unit = $1.75

At the end of each month, the inventory should be = 30%

The April 1 inventory = 20,700 units

Therefore, the budgeted material in units required for April production

= Materials needed + Ending inventory requirement - Beginning inventory available

= 69,000 + (65,000 × 30%) - 20,700

= 69,000 + 19,500 - 20,700

= 67,800 units