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Sarafiny corporation is in the process of preparing its annual budget. the following beginning and ending inventory levels are planned for the year. beginning inventory ending inventory finished goods (units) 20,000 30,000 raw material (grams) 50,000 40,000 ? each unit of finished goods requires 7 grams of raw material. the company plans to sell 270,000 units during the year. ? how much of the raw material should the company purchase during the year?
Sarafiny corporation is in the process of preparing its annual budget. the following beginning and ending inventory levels are planned for the year. beginning inventory ending inventory finished goods (units) 20,000 30,000 raw material (grams) 50,000 40,000 ? each unit of finished goods requires 7 grams of raw material. the company plans to sell 270,000 units during the year. ? how much of the raw material should the company purchase during the year? O 1,970,000 grams
O 1,950,000 grams
O 2,000,000 grams
O 1,960,000 grams
Final answer:To determine the raw material purchase for Sarafiny Corporation, the total required for production based on unit sales must be calculated and inventory changes factored in. The calculated need is 1,900,000 grams, yet this answer does not match any options provided, suggesting an error in the provided calculation or options.Explanation:To calculate how much raw material Sarafiny Corporation should purchase during the year, we need to determine the total raw material needed for production and then adjust for inventory changes. The corporation plans to sell 270,000 units of finished goods, with each unit requiring 7 grams of raw material. Therefore, the total raw material needed for production is 270,000 units × 7 grams/unit = 1,890,000 grams.We must also account for inventory adjustments: the planned decrease in raw material inventory is 50,000 grams (beginning inventory) - 40,000 grams (ending inventory) = 10,000 grams. Therefore, the total raw material to be purchased is 1,890,000 grams (required for production) + 10,000 grams (inventory decrease) = 1,900,000 grams. However, this number is not listed in the options provided, indicating a potential mistake in the calculation or the options given....