Sarter Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year. Finished goods (units) Beginning inventory 70,000 Ending inventory 20,000 60,000 Raw material (grams) 50,000 Each unit of finished goods requires 3 grams of raw material. The company plans to sell 880,000 units during the year. How much of the raw material should the company purchase during the year? a. 2,550,000 grams b. 2,490,000 grams c. 2,480,000 grams d. 2,500,000 grams
Sarter Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year. Finished goods (units) Beginning inventory 70,000 Ending inventory 20,000 60,000 Raw material (grams) 50,000 Each unit of finished goods requires 3 grams of raw material. The company plans to sell 880,000 units during the year. How much of the raw material should the company purchase during the year? a. 2,550,000 grams b. 2,490,000 grams c. 2,480,000 grams d. 2,500,000 grams
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 6E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...
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Transcribed Image Text:Sarter Corporation is in the process of preparing its annual
budget. The following beginning and ending inventory levels
are planned for the year.
Finished goods
(units)
Beginning
inventory
70,000
Ending
inventory
20,000
60,000
Raw material (grams) 50,000
Each unit of finished goods requires 3 grams of raw material.
The company plans to sell 880,000 units during the
year.
How much of the raw material should the company purchase
during the year?
a. 2,550,000 grams
b. 2,490,000 grams
c. 2,480,000 grams
d. 2,500,000 grams
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