E9.28 (appendix) Budgeting production and direct material purchases: manufacturer LO 9.119 Dante Ltd

E9.28 (appendix) Budgeting production and direct material purchases: manufacturer LO 9.119 Dante Ltd prepares annual budgets. The following beginning and ending inventory levels (in units) are planned for next year. Four kilograms of direct material are required to produce each unit of finished product. Page 457 1 January 31 December Direct material 160 000 200 000 Work in process 40 000 40 000 Finished goods 320 000 200 000 Required: 1. If Dante plans to sell 960 000 units during the year, calculate the number of units the firm would have to manufacture. 2. If 1 200 000 finished units are to be manufactured by Dante during the year, determine the amount of direct material that needs to be purchased.

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