A company plans to produce 50,000 units of finished goods during the upcoming budget period. Each finished unit requires 3 units of raw material. At…

CA Intermediate · Cost and Management Accounting · MTP · September 2026
A company plans to produce 50,000 units of finished goods during the upcoming budget period. Each finished unit requires 3 units of raw material. At the beginning of the period, the company has 80,000 units of raw material in inventory. By the end of the period, the company wants to increase the raw material inventory to 90,000 units. Based on this information, calculate how many units of raw material need to be purchased during the budget period.
(A) (A) 1,40,000 units
(B) (B) 1,50,000 units
(C) (C) 1,60,000 units
(D) (D) 1,70,000 units

Suggested Answer and Working Notes:

Correct Answer: Option (C)

(C) 1,60,000 units

Topics: Budgets and Budgetary Control

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