Problem: Sarter Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.
Beginning Inventory Ending Inventory
Finished goods (units) 70,000 20,000
Raw material (grams) 50,000 60,000
Each unit of finished goods requires 3 grams of raw material.
How much of the raw material should the company purchase during the year?
- 2,550,000 grams
- 2,480,000 grams
- 2,490,000 grams
- 2,500,000 grams