Comma Manufacturing budgets on an annual basis for its fiscal year.The following beginning and ending inventory levels are planned for the fiscal year of July 1, 2012 to June 30, 2013: $\begin{array}{ll}
&\text { June 30, } 2013& \text { June 30, } 2012\
\text { Raw Materials } & 3,000 \text { kilos }& 2,000 \text { kilos }
\end{array}$
Three kilos of raw materials are needed to produce each unit of finished product.If Comma Manufacturing plans to produce 560,000 units during the 2012-2013 fiscal year, how many kilos of materials will the company need to purchase for its production during the year?
A)1,681,000
B)1,686,000
C)1,680,000
D)1,678,000

Question

Comma Manufacturing budgets on an annual basis for its fiscal year.The following beginning and ending inventory levels are planned for the fiscal year of July 1, 2012 to June 30, 2013: $\begin{array}{ll}
&\text { June 30, } 2013& \text { June 30, } 2012\
\text { Raw Materials } & 3,000 \text { kilos }& 2,000 \text { kilos }
\end{array}$
 Three kilos of raw materials are needed to produce each unit of finished product.If Comma Manufacturing plans to produce 560,000 units during the 2012-2013 fiscal year, how many kilos of materials will the company need to purchase for its production during the year?
A)1,681,000
B)1,686,000
C)1,680,000
D)1,678,000

Quizplus · Accepted Answer

The company needs 3 kilos of raw materials to produce each unit of finished product. If the company plans to produce 560,000 units during the 2012-2013 fiscal year, it will need 560,000 units * 3 kilos/unit = 1,680,000 kilos of raw materials. Since the company has 2,000 kilos of raw materials at the beginning of the fiscal year and plans to have 3,000 kilos at the end of the fiscal year, it will need to purchase 1,680,000 kilos - 2,000 kilos + 3,000 kilos = 1,681,000 kilos of raw materials during the year.

Comma Manufacturing Budgets on an Annual Basis for Its Fiscal