Whistle Works manufacturers safety whistle keychains. They have the following in

Question

Whistle Works manufacturers safety whistle keychains. They have the following information available to prepare their master budget: Units to be produced October November December 5,250 6,120 Whistle Works sells each whistle for $11. It takes 2 ounces of metal to produce each whistle at a cost of $0.40 per ounce. They prefer to have 10% of materials required for the following month's production in ending inventory as well. How many ounces of direct materials does Whistle Works need to purchase in October to meet production needs? OA. 6,130 ounces OB. 10,410 ounces OC. 5,200 ounces D. 10,390 ounces

Explanation / Answer

So, as per above calculations, materials required to be purchased for October is 10,410 ounces and option B is the correct option

Calculations Particulars October November December A Units to be produced        5,200            5,250           6,120 B Material required per unit                 2                    2                   2 C = A x B Total material required for production      10,400         10,500         12,240 D = C of Next month x 10% Materials as closing Inventory        1,050            1,224 E = C + D Total material required for October      11,450         11,724 F = C x 10% Opening Inventory of materials        1,040            1,050 G = E - F Material required to be purchased      10,410         10,674

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