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Prestwich Company has budgeted production for next year as follows:
9 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 14% of the next
quarter's production needs for material A. A total of 6,000 pounds of material A are on hand to
start the year. Budgeted purchases of material A for the second quarter would be:
702,000 pounds.
727,200 pounds.
714,600 pounds.
357,300 pounds. QuarterFirstSecondThirdFourth Production in
units58,00078,00088,00068,000
Solution
Materials required for 2nd quarter production $ 702,000 Add: Desired closing stock $
110,880 Less: Opening stock $ 98,280 Budgeted purchases $ 714,600

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Prestwich Company has budgeted production for next year as follows.pdf

  • 1. Prestwich Company has budgeted production for next year as follows: 9 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 14% of the next quarter's production needs for material A. A total of 6,000 pounds of material A are on hand to start the year. Budgeted purchases of material A for the second quarter would be: 702,000 pounds. 727,200 pounds. 714,600 pounds. 357,300 pounds. QuarterFirstSecondThirdFourth Production in units58,00078,00088,00068,000 Solution Materials required for 2nd quarter production $ 702,000 Add: Desired closing stock $ 110,880 Less: Opening stock $ 98,280 Budgeted purchases $ 714,600