Reference no: EM132560521

A sales budget is given below for one of the products manufactured by GH Inc.:

January                      25,000 units

February                       40,000 units

March                              65,000 units

April                                45,000 units

May                                 35,000 units

June                                30,000 units

The inventory of finished goods at the end of each month must equal 20% of the next month's sales. However, on December 31, the finished goods inventory totaled only 4,000 units.

Each unit of product requires three kilograms of specialized material. Since the production of this specialized material by GH's suppliers is sometimes irregular, the company has a policy of maintaining an ending inventory at the end of each month equal to 30% of the next month's production needs. This requirement had been met on January 1 of the current year.

Required:

Question 1: A budget showing the quantity of material to be purchased each month for January, February, and March, and in total for the quarter.