Blueberry Corporation has budgeted production for the next year as follows: Quar

Question

Blueberry Corporation has budgeted production for the next year as follows: Quarter First Second Third Fourth 60,000 50,000 90,000 90,000 Production in un.60000 50,000 90,000 90,000 4.1 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 Select one O a. 246,000 b. 297.250 .-1246 O d. 205,000

Explanation / Answer

Calculate budgeted purchases of material A :

Purchase = Material used in production+Desired ending inventory-beginning inventory

= (50000*4.1)+(90000*4.1*25%)-(50000*4.1*25%)

Purchase = 246000

so answer is a) 246000

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