** I have posted this question multiple times and have received the wrong answer. Please ensure it is accurate, to help with that I will copy and paste an example of this question below.

QUESTION:

ABC Companys budgeted sales for June, July, and August are 13,400, 17,400, and 15,400 units, respectively. ABC requires 30% of the next months budgeted unit sales as finished goods inventory each month. Budgeted ending finished goods inventory for May is 4,020 units. Each unit that ABC Company produces uses 3 pounds of raw material.ABC requires 25% of the next months budgeted production as raw material inventory each month.

Required:

Calculate the number of pounds of raw material to be purchased in June.

Number of pounds:

****EXAMPLE:

ABC Companys budgeted sales for June, July, and August are 12,200, 16,200, and 14,200 units, respectively. ABC requires 30% of the next months budgeted unit sales as finished goods inventory each month. Budgeted ending finished goods inventory for May is 3,660 units. Each unit that ABC Company produces uses 2 pounds of raw material.ABC requires 25% of the next months budgeted production as raw material inventory each month.

Use the cost of goods sold model, and work from the bottom up and then top down to calculate production:

	June		July
Beginning inventory	3,660		4,860
Add: Production	?		?
Goods available for sale	?		?
Less: Ending inventory (16,200 30%)	(4,860	)
Less: Ending inventory (14,200 30%)			(4,260	)
Units sold	12,200		16,200

June:	Goods available for sale = 12,200 + 4,860 = 17,060 units
	Production = 17,060 3,660 = 13,400 units
July:	Goods available for sale = 16,200 + 4,260 = 20,460 units
	Production = 20,460 4,860 = 15,600 units

Use the cost of goods sold model, but notice that raw material used is a function of quantity produced from the production budget. Each unit requires 2 pounds of raw material.

	June
Beginning inventory (13,400 2 pounds 30%)	6,700
Purchases	?
Raw materials available for use	?
Less: Ending inventory (15,600 2 pounds 30%)	(7,800)
Raw materials used in production (13,400 2 pounds)	26,800

Raw materials available for use = 26,800 + 7,800 = 34,600 pounds

Purchases = 34,600 6,700 = 27,900 pounds