Budgeting

The company is preparing budget for the next year for Product A. Each unit of product A requires 5 kgs of material X. The budgeted opening inventory for Product A is 5 000 units and the company plans to increase closing inventory by 30% by the end of the year. The planned opening inventory for Material X is 50 000 kgs and in order to avoid stock outs the required level of ending inventory has been increased to 60,000 kgs. The required level of sales is 70 000 units of Product A.

Calculate:

How many units of Product A will need to be produced?

What should be the level of purchases of Materials?