Assume for a Firm That Budgeted Production for July and August

question 11

Multiple Choice

Assume for a firm that budgeted production for July and August is 180 000 and 200 000 units respectively. It takes half a kilogram of direct material to make one unit of finished product. Materials inventory is maintained at 10 per cent of the next month's budgeted production needs. If the 30 June inventory of materials was 5000 kg, how many kilograms of direct material should be purchased during July?

• A) 105 000 kg
• B) 195 000 kg
• C) 90 000 kg
• D) 95 000 kg

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