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Question - Doanne Food Processing expects to have 36,000 pounds of raw materials inventory on hand on March 31, the end of the current year. The company budgets the following production (in units) for the first four months of the coming year:
April - 120,000
May - 130,000
June - 140,000
July - 120,000
For the budgeting period, the firm desires each month's ending raw material inventory to be 10% of the next month's production needs. A finished unit requires three pounds of raw materials.
Budgeted purchases for raw materials during April should be:
A. 224,000.
B. 360,000.
C. 363,000.
D. 399,000.
E. 435,000.
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