Lion Company is budgeting sales of 100,000 units of P Product for the month of S

Question

Lion Company is budgeting sales of 100,000 units of P Product for the month of September. Production of one unit of P Product requires two units of Material Y and three units of Material Z. Actual inventory units at September 1 and budgeted inventory units at September 30 are as follows:

P Product actual 20,000, budgeted 10,000
Material Y actual 25,000, budgeted 18,000
Material Z actual 22,000, budgeted 24,000

How many units of Material Z is Lion planning to purchase during September?
a.272,000 b. 298,000 c.302,000 d.328,000

please show work

Explanation / Answer

P Product Units sale 100000 Budgeted ending inventory 10000 Total product required 110000 Less: Beginning Inventory 20000 Product required 90000 Material to be purchased Y Z Requirement for production 180000 270000 Add Budgeted ending Inventory 18000 24000 Total Raw Material required 198000 294000 Less: Beginning inventory 25000 22000 Material to be purchased 173000 272000

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