Masterson Company's budgeted production calls for 66,000 units in April and 62,000 units in May of a key raw material that costs $1.60 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 19,800 unit. What is the budgeted materials needed in units for April?

Question

Business

Madalyn Baxter

3 December, 22:16

Masterson Company's budgeted production calls for 66,000 units in April and 62,000 units in May of a key raw material that costs $1.60 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 19,800 unit. What is the budgeted materials needed in units for April?

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Moshe Rasmussen · Answer 1

The budgeted materials needed in units for April is 64,800 units

Explanation:

In order to calculate the budgeted materials needed in units for April we would have to use the following formula:

Budgeted Materials = Materials needed + ending inventory - beginning inventory available

To calculate the ending inventory we would have to use the following formula:

Ending inventory=0.3*Following month budgeted materials

Ending inventory=0.3*62,000

Ending inventory=18,600

Therefore, Budgeted Materials = 66,000+18,600-19,800

Budgeted Materials = 64,800 units

The budgeted materials needed in units for April is 64,800 units