The Tobler Company had budgeted production for the year as follows: 6 pounds of

Question

The Tobler Company had budgeted production for the year as follows:

6 pounds of raw materials are required for each unit produced. Raw materials on hand at the start of the year total 13,000 lbs. The raw materials inventory at the end of each quarter should equal 11% of the next quarter's production needs in materials. Budgeted purchases of raw materials in the second quarter would be (in lbs.):

124,680 lbs.

126,000 lbs.

129,960 lbs.

128,640 lbs.

Explanation / Answer

quarter 1 2 3 4 Units 19000 21000 25000 23000 Opening inventory 13000 13860 purchases 114860 128640 165180 purchases = material required + closing inventory - opening inventory closing inventory 13860 16500 15180 Material required 114000 126000 150000 138000 Answer is 128640 lbs

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