Sartain Corporation is in the process of preparing its annual budget. The follow

Question

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

Beginning Inventory Ending Inventory
Finished goods (units) 28,000 78,000
Raw material (grams) 58,000 48,000

Each unit of finished goods requires 2 grams of raw material.

If the company plans to sell 750,000 units during the year, how much of the raw material should the company purchase during the year?

1,590,000 grams
1,648,000 grams
1,600,000 grams
1,618,000 grams

Explanation / Answer

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

Beginning Inventory Ending Inventory
Finished goods (units) 28,000 78,000
Raw material (grams) 58,000 48,000

Each unit of finished goods requires 2 grams of raw material.

If the company plans to sell 750,000 units during the year, how much of the raw material should the company purchase during the year?

1,590,000 grams
1,648,000 grams
1,600,000 grams
1,618,000 grams

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