3. Raw Materials Purchasing Budget Each unit of SUPER DUPER widget requires 0.6 pounds of WHAM compound. To prevent shortages, the company would like the inventory of WHAM compound on hand at the end of each month to equal 40% of the following month's production needs. The inventory on July 1 is 1,344 pounds. WHAM compound costs $12.00 per pound and Vaughan pays for 80% of its purchases in the month of purchase; the remainder is paid in the following month. $41,184 of WHAM compound was purchased in June and 80% was paid for in June. 3rd Quarter July August September 3rd Quarter 69 70 71 72 11.200 1 6.720 Required Production RM per Unit Production Needs Add: Desired Ending Inventory Total Needs Lens Beginning Inventory RM to be purchased Costo RM per pound Cost of RM to be purchased 74 75 76 5,600 1 3,360 4,608 7,968 1344 6,621 12 29.4685 19.200 1 11520 2,688 14,208 1.608 9.600 12 115.2005 36,000 1 21.600 1.680 23,280 6.220 2.688 5/12 12 68,54415 21.936 12 263232 S 3. Raw Materials Purchasing Budget Each unit of SUPER DUPER widget requires 0.6 pounds of WHAM compound. To prevent shortages, the company would like the inventory of WHAM compound on hand at the end of each month to equal 40% of the following month's production needs. The inventory on July 1 is 1,344 pounds. WHAM compound costs $12.00 per pound and Vaughan pays for 80% of its purchases in the month of purchase; the remainder is paid in the following month. $41,184 of WHAM compound was purchased in June and 80% was paid for in June. 3rd Quarter July August September 3rd Quarter 69 70 71 72 11.200 1 6.720 Required Production RM per Unit Production Needs Add: Desired Ending Inventory Total Needs Lens Beginning Inventory RM to be purchased Costo RM per pound Cost of RM to be purchased 74 75 76 5,600 1 3,360 4,608 7,968 1344 6,621 12 29.4685 19.200 1 11520 2,688 14,208 1.608 9.600 12 115.2005 36,000 1 21.600 1.680 23,280 6.220 2.688 5/12 12 68,54415 21.936 12 263232 S