Metallica Company is in the process of preparing its annual budget. The followin

ID: 2512618 • Letter: M

Question

Metallica Company is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.

The company plans to sell 570,000 units during the year. How much raw material should be purchased during the year?

rev: 11_26_2016_QC_CS-71070

1,850,000 grams

1,902,000 grams

1,872,000 grams

1,860,000 grams

Metallica Company is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.

A.1,850,000 grams

first let us calculate the annual finished goods to be produced = sale units + ending inventory - beginning inventory

=>570,000 +72,000 - 22,000

=>620,000 units.

raw material (grams ) to be need to manufacture 620,000 units =>620,000 *3 grams per unit =>1,860,000 grams.

raw material to be purchased = raw materials needed for manufacture + closing balance of raw material - beginning balance of inventory

=>1,860,000 + 42,000 -52,000

=>1,850,000 grams.