Accounting 202 PURCHASES BUDGET: FACTS: David, Inc. is preparing its purchases budget for April. The following sales information has been gathered: April May Unit sales 400 500 Raw materials inventory on 1 April: 450 pounds April production: 430 units Cost per pound: $ 5 Desired ending inventory each month: Raw materials: 25% of next month\'s production. Number of pounds of raw material required per finished unit: 4 lb. REQUIRED: a) How many pounds of raw materials should be purchased in April ? b) What will be the cost of these purchases? Solution a) Purchase of Raw Material in April: Production of May: Required 500, Ending Units = 30, Production Required 470 Units. Material Required = 470 x 4 = 1,880 lb. b) Cost of Purchase = 1,740 x 5 = $8,700 .