Prester Corporation Has Budgeted Production for Next Year as Follows

question 152

Multiple Choice

Prester Corporation has budgeted production for next year as follows:
Two pounds of material A are required for each unit produced. The company has a policy of maintaining a stock of material A on hand at the end of each quarter equal to 25% of the next quarter's production needs for materialA. A total of 30,000 pounds of material A are on hand to start the year. Budgeted purchases of material A for the second quarter would be:

• A)145,000 pounds
• B)140,000 pounds
• C)135,000 pounds

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