Question 1

Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.

	Beginning Inventory	Ending Inventory
Finished goods (units)	20,000	30,000
Raw material (grams)	50,000	40,000

Each unit of finished goods requires 7 grams of raw material. The company plans to sell 270,000 units during the year

How much of the raw material should the company purchase during the year?

		1,960,000 grams
		1,950,000 grams
		1,970,000 grams
		2,000,000 grams