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Sagot :
Answer:
1.8 yards
Explanation:
Production requirement 1.8 yards
Ending inventory = 20% of 1.8 yards= 20/100 * 1.8= 0.36 yards
Materials Required= 1.8-0.36= 1.44 yards
If the material on hand is 0.36 yards i.e 20 % of the production requirement.Budgeted purchases for the second quarter would 1.8 yards because when 0.36 yards is available as the ending inventory. But materials on hand must have a balance of 0.36 yards for the next quarter so it would not effect the purchases.
To maintain the balance of materials on hand the amount of purchases made is 1.8 yards as 0.36 yards will be kept for the third quarter and 0.36 is already present for the second quarter
1.44 yards for production + 0.36 yards for the ending inventory= 1.8 yards
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