Crosser Company budgets on a quarterly basis. The following beginning and ending inventory levels (in units) are planned for the first and second quarters of 2012:
Jan-March, 2012 April-June, 2012
Raw materials 43,000 48,000
Work in process 15,000 18,000
Finished goods 81,000 45,000
Two units of raw material are needed to produce each unit of finished product.
Required:
If Crosser Company were to manufacture 430,000 finished units (in total) during the first two quarters of 2012, how many units of raw material would it need to purchase?
Prepare the purchases budget for the first six months of 2012. Enter all amounts as positive numbers.
Dec. 31, 2011 and June 30, 2012
Required production in units
Raw material needed per unit
Units of raw material needed
Add: Desired ending inventory
Total budgeted needs
Less: Beginning inventory
Units of raw material to be purchased