Alliance Company budgets production of 24,000 units in January and 28,000 units in the February.Each finished unit requires 4 pounds of raw material K that costs $2.50 per pound.Each month's ending raw materials inventory should equal 40% of the following month's budgeted materials.The January 1 inventory for this material is 38,400 pounds.What is the budgeted materials needed in pounds for January?

A) 102,400 pounds.
B) 96,000 pounds.
C) 57,600 pounds.
D) 140,800 pounds.
E) 83,200 pounds.

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ZAIDUQAIRY ZACHRY · Accepted Answer

Final Answer : A, Explanation :  The budgeted materials needed for January is calculated as follows:  - January production requires: 24,000 units * 4 pounds = 96,000 pounds.  - February production requires: 28,000 units * 4 pounds = 112,000 pounds.  - Ending inventory for January should be 40% of February's requirement: 112,000 * 0.40 = 44,800 pounds.  - Total materials needed for January = January production requirement + January ending inventory - January beginning inventory = 96,000 + 44,800 - 38,400 = 102,400 pounds.

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