Two pounds of raw materials are required to produce one unit of product. The company wants raw materials on hand at the end of each month equal to 30% of the following month's production needs. The company is expected to have 36,000 pounds of raw materials on hand on January 1. Budgeted production for February should be:

75,000 units

Explanation:

The question is not complete, the complete question is below;

Marple Company's budgeted production in units and budgeted raw materials purchases over the next three months are given below:

January February March

Budgeted production (in units) 60,000 ? 100,000

Budgeted raw materials purchases (in pounds) 129,000 165,000 188,000

Two pounds of raw materials are required to produce one unit of product. The company wants raw materials on hand at the end of each month equal to 30% of the following month's production needs. The company is expected to have 36,000 pounds of raw materials on hand on January 1. Budgeted production for February should be:

Solution

In this question, we are asked to calculate the budgeted production for the month of February for Maple company.

To solve this, we first need to calculate the actual amount of raw materials purchased in the month of January

To do this, we will need to calculate the amount of stock needed to hit the projected production unit of 60,000

Mathematically this is;

60,000 * 2 = 120,000 pounds necessary.

Out of this 120,000 we can identify that 36,000 are already available in December

Thus, the actual amount needed to meet January’s production budget would be

120,000 - 36,000 = 84,000

129,000 units have been bought in January , Thus, february’s production amount in units would be;

129,000 - 84,000 = 45,000

45,000 is the ending raw materials inventory for January

Now, we will be needing 30% of this in February according to the question, this is mathematically equal to

45,000 / 30% = 150,000

We now proceed to calculate the number of units. From the question, we identify that 2 units of products are needed to produce one material unit.

The budgeted production would thus be;

150,000 / 2 = 75,000 units.