CA Inter P4 · Chapter 14 · Question 3 of 7
Budgeted production is 25,500 units and each unit needs 2 kg of raw material. Opening stock of raw material is 6,000 kg and the desired closing stock is 8,000 kg. The budgeted purchase of raw material is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) 53,000 kg
Explanation
Material required for production = 25,500 x 2 = 51,000 kg. Purchases = requirement + closing stock - opening stock = 51,000 + 8,000 - 6,000 = 53,000 kg.
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