Budgeting material purchases. The Mahoney Company has prepared a sales budget of 50,400 finished units for a
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Budgeting material purchases. The Mahoney Company has prepared a sales budget of 50,400 finished units for a three-month period. The company has an inventory of 26,400 units of finished goods on hand at December 31 and has a target finished goods inventory of 28,800 units at the end of the succeeding quarter.
It takes three litres of direct materials to make one unit offinished product. The company has an inventory of 108,000 litres of direct materials at December 31 and has a target ending inventory of 132,000 litres.
Required How many litres of direct materials should be purchased during the three months ending March 31?
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