Direct materials needed for production is calculated by a. multiplying units to

Question

Direct materials needed for production is calculated by

a.

multiplying units to be produced by direct materials per unit.

b.

subtracting units to be produced from direct materials per unit.

c.

dividing units to be produced by direct materials per unit.

d.

adding units to be produced to direct materials per unit.

e.

subtracting direct materials per unit from units to be produced.

Explain.

a.

multiplying units to be produced by direct materials per unit.

b.

subtracting units to be produced from direct materials per unit.

c.

dividing units to be produced by direct materials per unit.

d.

adding units to be produced to direct materials per unit.

e.

subtracting direct materials per unit from units to be produced.

Explanation / Answer

Correct Option ---(a) multiplying units to be produced by direct materials per unit.

Explanation

Let’s say cost of material per unit =$60

And total units to be produced = 500

Then total cost of material will be ($60 x 500)= $30000

Cost of labor or overheads can also be calculated in similar way.

All the other options will give the wrong answer

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