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Broad Co produces quarterly rolling budgets and had forecast the costs of material purchases for the next four quarters (quarters 1, 2, 3 and 4). Purchases for quarter 1 were budgeted to be $220,000 and it was anticipated that the cost of materials would rise at a rate of 2% per quarter.
At the end of quarter 1:
Actual material purchases were recorded as $210,000. This was due to a change of material supplier during the quarter.
A revised estimate for the increase in material purchase costs was made. The rise was now predicted to be only 1% per quarter.
The budget was updated.
What estimate for total annual material purchases should be recorded in the updated budget (to the nearest whole $)?
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