Question: Production and purchases budgets. Bluebird Co. is forecasting sales of 80,600 units of product for January. To make one unit of finished product, 5 pounds of raw materials are required. Actual beginning and desired ending inventories of raw materials and finished goods are:
January 1 January 31
(Actual) (Desired)
Raw materials (pounds) 97,100 88,600
Finished goods (units) 7,700 10,800
Required:
a. Calculate the number of units of product to be produced during January.
b. Calculate the number of pounds of raw materials to be purchased during January.