Marst Corporation's Budgeted Production in Units and Budgeted Raw Materials

Marst Corporation's budgeted production in units and budgeted raw materials purchases over the next three months are given below: 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 30, 000 pounds of raw materials on hand on January 1.Budgeted production for February should be:

A) 60, 000 units
B) 54, 000 units
C) 84, 000 units
D) 108, 000 units

Correct Answer:

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