A company plans to produce 44,000 units during the budget period. The company requires 4 units of raw material to produce 1 unit of finished goods.…

CA Intermediate · Cost and Management Accounting · RTP · January 2026
A company plans to produce 44,000 units during the budget period. The company requires 4 units of raw material to produce 1 unit of finished goods. The company currently has 1,00,000 units of raw material on hand and wishes to have an inventory of 1,10,000 units of raw material on hand at the end of the budget period. The number of raw material units to be purchased during the budget period is
(A) 1,76,000 units
(B) 1,67,000 units
(C) 1,86,000 units
(D) 1,68,000 units

Suggested Answer and Working Notes:

Correct Answer: Option (C)

1,86,000 units

Topics: Budgets and Budgetary Control

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