A sporting goods manufacturer budgets production of 45,000 pairs of ski boots in the first quarter and 30,000 pairs in the second quarter of the upcoming year. Each pair of boots require 2 kg of a key raw material. The company aims to end each quarter with ending raw materials inventory equal to 20% of the following quarter's material needs. Beginning inventory for this material is 18,000 kg and the cost per kg is $8. What is the budgeted materials need in kg. in the first quarter?
A) 90,000 kg.
B) 84,000 kg.
C) 108,000 kg.
D) 102,000 kg.
E) 120,000 kg.
B) 84,000 kg.
Explanation: Budgeted production units * materials requirement per unit = materials needed Materials needed + ending inventory requirements - beginning inventory available = materials to be purchased
45,000 * 2 kg = 90,000 kg; 90,000 kg + (30,000 * 2 kg * 20%) - 18,000 kg = 84,000 kg
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