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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