Accounting for materials

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December 6, 2014 at 8:20 pm #219010
Oyekemi
Member
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please help me solve this
A company manufactures and sells one product which requires 8 kg of raw materials in its manufacture. The budgeted data relating to the next period are as follows:
Units
Sales 19,000
Opening inventory of finished goods 4,000
Closing inventory of finished goods 3,000
Kg
Opening inventory of raw materials 50,000
Closing inventory of raw materials 53,000
What is the budgeted raw material purchases for next period?
December 7, 2014 at 8:38 am #219063
John Moffat
Keymaster
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Production of finished goods = 19.000 + 3,000 – 4,000 = 18,000
So raw materials needed for production = 18,000 x 8 = 144,000 kg
Purchases of raw materials = 144,000 + 53,000 – 50,000 = 147,000 kg
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