Prestwich Company has budgeted production for next year as follows: Two pounds o

Question

Prestwich Company has budgeted production for next year as follows:

Two pounds of material A are required for each unit produced. The company has a policy of maintaining a stock of material A on hand at the end of each quarter equal to 25% of the next quarter's production needs for material A. A total of 30,000 pounds of material A are on hand to start the year. Budgeted purchases of material A for the second quarter would be:

205,000 pounds

.

Prestwich Company has budgeted production for next year as follows:

Two pounds of material A are required for each unit produced. The company has a policy of maintaining a stock of material A on hand at the end of each quarter equal to 25% of the next quarter's production needs for material A. A total of 30,000 pounds of material A are on hand to start the year. Budgeted purchases of material A for the second quarter would be:

Explanation / Answer

Budgeted purchases of material A           165,000.00 Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars First Q Second Q Third Q Fourth Q Total Production in Units            60,000.00            80,000.00            90,000.00            70,000.00 Material per unit                      2.00                      2.00                      2.00                      2.00 Total pounds required for production (a)         120,000.00         160,000.00         180,000.00         140,000.00 Ending Material Required at 25% (b)            40,000.00            45,000.00            35,000.00 Beginning raw material ©            30,000.00            40,000.00            45,000.00            35,000.00 Budgeted purchases of material A = a+b -c         130,000.00         165,000.00         170,000.00

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