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Question - Gamma plc purchases material and refines it before onward sale. Budgeted sales of the refined material are as follows.
Litres
January 40,000
February 50,000
March 30,000
(i) The target month-end inventory of unrefined material is 30% of the material needed for the following month's budgeted production.
(ii) The targeted month-end inventory of refined material is 30% of next month's budgeted sales.
Required - Calculate the budgeted purchases of unrefined material for January.
a) 56,200 litres
b) 49,750 litres
c) 48,250 litres
d) 43,300 litres
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