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Reid Company is budgeting production of 100,000 units of product R for the month of September this year. Production of one unit of product R requires three units of material B. For material B, the actual inventory units at September 1 were 22,000 units and budgeted inventory units at September 30 are 24,000. How many units of material B is Reid planning to purchase during September?

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Answer:

Purchases= 302,000 units

Explanation:

Giving the following information:

Production= 100,000 units

Production of one unit of product R requires three units of material B.

For material B:

Beginning inventory= 22,000

Desired inventory= 24,000

To calculate the purchases, we need to use the following formula:

Purchases= production + desired ending inventory - beginning inventory

Purchases= 100,000*3 + 24,000 - 22,000

Purchases= 302,000 units

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