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5) Prestwich Company has budgeted production for next year as follows: 1 Quarter 2nd Quarter 3rd Quarter 4th Quarter Production in units 60,000 80,000 90,000
5) Prestwich Company has budgeted production for next year as follows: 1" Quarter 2nd Quarter 3rd Quarter 4th Quarter Production in units 60,000 80,000 90,000 70,000 Two pounds of material A are required for each unit of finished good produced. The company has a policy of maintaining a stock of material A on hand at the end of each quarter equal to 25% of the next quarter's production needs. A total of 30,000 pounds of material A are on hand to start the year. The cost of material A is $3 per pound. Prestwich pays for 60% of the purchases in the month of purchase and 40% in the following month. How many pounds of material A would Prestwich purchase in the 2nd quarter? (Answer: 165,000) 80,000 pounds 165,000 pounds 240,000 Pounds d. Pounds C
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