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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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A company requires 100 pounds of plastic to meet the production needs of a small toy. It currently has 10 pounds of plastic inventory. The desired ending inventory of plastic is 30 pounds. How many pounds of plastic should be budgeted for purchasing during the coming period?

  1. a. 80 pounds
  2. b. 110 pounds
  3. c. 120 pounds
  4. d. 130 pounds
  5. e. None of these.

To determine

Identify the units of material that should be budgeted for purchasing during the coming period.

Explanation

Direct Material Purchases Budget: Direct material purchases budget is a part of operating budget. Direct material purchases budget is prepared by adding materials required at the end and subtracting material available in the beginning, to the material required for production within the period.

Compute material that should be budgeted for purchasing during the coming period:

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