Determine the amount of raw material to be purchased

Reference no: EM131922304

Question: Alder Company budgets on an annual basis. The following beginning and ending inventory levels (in units) are planned for the next year. Three units of raw material are required to produce each unit of finished product.

January 1		December 31
Raw material	36,000	47,000
Work in process	13,000	13,000
Finished goods	96,000	75,000

1. If Alder Company plans to sell 456,000 units during the year, compute the number of units the firm would have to manufacture during the year.

2. If 508,000 finished units were to be manufactured by Adler Company during the year, determine the amount of raw material to be purchased.

Reference no: EM131922304

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