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university of southern california Operations And Supply Chain Management Assignment Help - Budgeting


Question - Budgeting material purchases. The Mahoney Company has prepared a sales budget of 45,000
finished units for a three-month period. The company has an inventory of 16,000 units of finished
goods on hand at December 31 and has a target finished goods inventory of 18,000 units at the end
of the succeeding quarter. It takes three gallons of direct materials to make one unit of finished
product. The company has an inventory of 60,000 gallons of direct materials at December 31 and has
a target ending inventory of 50,000 gallons at the end of the succeeding quarter. How many gallons of
direct materials should be purchased the three months ending March 31?

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