Exercise 9-23 Budgeting Production and Direct-Material Purchases (LO 9-3, 9-6)

Bodin Company budgets on an annual basis. The following beginning and ending inventory levels (in units) are plannned for the year 20x1. Four units of raw material are required to produce each unit of finished product.

	January 1			December 31
Raw material		43,000			51,000
Work in process		14,000			14,000
Finished goods		97,000			56,000

Required:

1. If Bodin Company plans to sell 460,000 units during the year, compute the number of units the firm would have to manufacture during the year.

2. If 519,000 finished units were to be manufactured by Bodin Company during the year, determine the amount of raw material to be purchased.

1. Required production in units 2. Raw material purchases in units 419,000