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 675,521 units, estimated beginning inventory is 104,612 units, and desired ending inventory is 88,206 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 @ $0.66 per pound
Material B 1.00 lb. per unit @ $1.68 per pound
Material C 1.20 lb. per unit @ $1.05 per pound

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

Select the correct answer.

Explanation / Answer

Hi,

Please find the answer as follows:

Units Expected to be Produced = Sales + Closing Inventory - Opening Inventory = 675521 + 88206 - 104612 = 659115

Dollar Amount of Material A = 659115*.50*.66 = 217508

Option C is the correct answer.

Thanks.

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