Win Corporation sells a single product. Budgeted sales for the year are anticipa

Question

Win Corporation sells a single product. Budgeted sales for the year are anticipated to be 609,725 units, estimated beginning inventory is 107,791 units, and desired ending inventory is 86,358 units. The quantities of direct materials expected to be used for each unit of finished product are given below.

Material A .50 lb. per unit @ $0.55 per pound
Material B 1.00 lb. per unit @ $2.44 per pound
Material C 1.20 lb. per unit @ $1.77 per pound

What is the dollar amount of direct material A used in production during the year?

Explanation / Answer

Hi,

Please find the answer as follows;

Total Units to be Produced = 609725 + 86358 - 107791 = 588292

Dollar Amount of Direct Material A = 588292*.55*.50 = 161780.30

Answer is 161780.30 or 161780.

Thanks

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