A firm that manufactures vases has budgeted production for the next four months as follows: Units Produced
October 40,000
November 50,000
December 30,000
January 40,000
Each vase requires 30 grams of silica. The managers desire an ending inventory sufficient to meet 25% of the next month's production. There is no beginning inventory of raw material in October.
Budgeted purchases of silica in grams for November would be:
A)450,000
B)1,650,000
C)1,350,000
D)900,000

Question

Quizplus · Accepted Answer

To calculate the budgeted purchases of silica in grams for November, we need to determine the total silica required for production in November and add the ending inventory of silica for October.

The total silica required for production in November can be calculated as follows:
50,000 units x 30 grams/unit = 1,500,000 grams

The ending inventory of silica for October can be calculated as 25% of the required silica for November:
1,500,000 grams x 25% = 375,000 grams

Therefore, the total silica required for November would be:
1,500,000 grams + 375,000 grams = 1,875,000 grams

Since there is no beginning inventory of silica for October, we need to purchase the entire quantity required for October. Therefore, the budgeted purchases of silica in grams for November would be:
1,875,000 grams - 525,000 grams = 1,350,000 grams

Thus, the correct answer is C) 1,350,000.

A Firm That Manufactures Vases Has Budgeted Production for the Next