A company estimates that it will sell 100,000 units of finished goods in March. Each finished good requires 5 feet of raw materials. The projected March 1 inventory balances are 10,000 units of finished goods and 40,000 feet of raw materials. Desired March 31 inventory levels are 9,000 units of finished goods and 42,000 feet of raw materials. What amount of raw materials should the company plan to purchase during March?

 A company estimates that it will sell 100,000 units of finished goods in March. Each finished good requires 5 feet of raw materials. The projected March 1 inventory balances are 10,000 units of finished goods and 40,000 feet of raw materials. Desired March 31 inventory levels are 9,000 units of finished goods and 42,000 feet of raw materials. What amount of raw materials should the company plan to purchase during March?
497,000 feet.
500,000 feet.
502,000 feet.
503,000 feet.

 You Answered Correctly!
CORRECT! Two steps are required to solve this problem:

Step 1: Determine the number of units the company must produce to meet the sales requirements, adjusting for beginning and ending finished goods inventory.

Step 2: Determine the amount of raw material required to produce these units, adjusting for beginning and ending raw materials inventory.

Given this process, we have:

Step 1: +Sales + 100,000 units

-Beg. FG inventory - 10,000 units

+End. FG Inventory + 9,000 units

=Units to Produce = 99,000 units

Step 2: +RM req'd for Production + 495,000 ft. raw material*

-Beg. RM Inventory - 40,000 ft.

+End RM Inventory + 42,000 ft.

=RM to purchase = 497,000

* 99,000 FG units x 5 ft. per unit = 495,000 ft. raw material