Detailed Answer
(c) The requirement is to determine the number of
kilos of chemical Loire that Mien is planning to purchase in October.
The first step is to prepare a production budget for product
Nous.
Sales 53,000
Increase in ending inventory 6,000
Total units needed 59,000
Next, a purchases budget for raw material Loire should be prepared.
Production needs (59,000 × 4) 236,000
Decrease in ending inventory (50,000)
Total kilos needed 186,000
Note that the production needs for Loire equal the number of
units of Nous to be produced times the number of kilos of Loire
needed per unit (4).