Mandy Corporation sells a single product. Budgeted sales for the year are antici

Question

Mandy Corporation sells a single product. Budgeted sales for the year are anticipated to be 612,000 units estimated beginning inventory is 102,000 units, and desired ending inventory is 82,000 units. The quantities of direct materials expected to be used for each unit of finished product are given below Material A 0.50 lb. per unit$0.67 per pound Material B 1.00 lb. per unit $2.17 per pound Material 1.20 lb, per unit @ $0.96 per pound The dollar amount of Material C used in production during the year is O$750,182 $613,786 $681,984 $818,381

Explanation / Answer

C. $681,984

Production = 612,000 - (102,000 - 82,000) = 592,000

The dollar amount of Material C used in production during the year is:

= 592,000 * 1.20 * $0.96

= $681,984

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