Answer :
Final answer:
To determine the pounds of raw material to purchase in April, multiply the production budget by the pounds per unit and add 10% of the following month's production needs. Calculating for April and the inventory for May results in 135,600 pounds, with the closest option being 134,000 pounds (B).
Explanation:
To calculate the number of pounds of raw material needed to be purchased in April, we have to consider both the production budget for April and the inventory requirements for May. Since each unit requires 3 pounds of raw materials and the production budget for April is 41,000 units, we multiply these figures to find the total raw material needed for April's production:
- 41,000 units * 3 pounds/unit = 123,000 pounds for April's production
Additionally, the company maintains an inventory of raw materials equal to 10% of the following month's production needs. Therefore, for May's production budget of 42,000 units, which also require 3 pounds per unit, we calculate the inventory as follows:
- 42,000 units * 3 pounds/unit = 126,000 pounds for May's production
- 10% of 126,000 = 12,600 pounds for inventory
By adding the raw materials needed for April's production and the inventory required for May, we obtain the total amount to be purchased in April:
- 123,000 pounds (April production) + 12,600 pounds (May inventory) = 135,600 pounds
However, as none of the choices exactly matches 135,600 pounds, it's important to choose the closest option. Thus, the answer is 134,000 pounds, which is option B.
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