Prepare a materials purchases budget. (Obj. 2). Low Cost Manufacturing Company has projected its sales of Perfecto smoker grills to be 10,000 units during the year 19X9. At the beginning of 19X9, the company will have 1,200 smoker grills in stock, but the controller and purchasing manager have decided that the number of units in the finished goods inventory, as well as the number of units in the raw materials inventory, must be decreased by 25 percent by the end of 19X9.

One of the parts required for each grill is a smoking pot. At the start of 19X9, the company expects to have 1,000 smoking pots in its raw materials inventory. The recorded cost of the 1,000 units is $48 each. During 19X9, it is anticipated that the cost of raw materials will rise by 3.5 percent per unit.

a. How many pots will be required for production in 19X9?

b. How many pots will be purchased in 19X9?

c. What will be the total budgeted cost of the pots to be purchased in 19X9?

LO.1