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22 October, 09:54

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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  1. 22 October, 10:00
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    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
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