Pablo company has budgeted production for next year as follows: quarterfirst second third fourthproduction in units 48,000 88,000 98,000 78,000three pounds of material a are required for each unit produced. the company has a policy of maintaining a stock of material a on hand at the end of each quarter equal to 25% of the next quarter's production needs for material a. a total of 38,000 pounds of material a are on hand to start the year. budgeted purchases of material a for the second quarter would be: 72,500 pounds.330,000 pounds.271,500 pounds.337,500 pounds.

271,500 pounds

Explanation:

Given:

Quarter                              FIRST      SECOND     THIRD     FOURTH

Production in unit                  48000     88000        98000      78000

Raw material per unit               3               3                 3                 3

Thus,

Need for material  = Production in unit × Raw material per unit

Quarter                                         FIRST      SECOND     THIRD     FOURTH

Need for material in production  144,000   264,000     294,000     234,000

Desired ending inventory = 25% of next quarter's production needs for material

ADD:

Desired ending inventory             66000       73500      58500  

Total need of material = Need for material in production + Desired ending inventory

Quarter                              FIRST      SECOND     THIRD      FOURTH

Total need of material =       210,000    337,500     352,500  

Beginning inventory             38000  66000       73500  

Total purchase = Total need of material - Beginning inventory

Quarter                              FIRST      SECOND     THIRD      FOURTH

Total purchase =                   172,000     271,500      279,000

Hence,

The answer is  271,500 pounds

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