XYZ Company makes and sells a single product. Each finished unit requires four p

Question

XYZ Company makes and sells a single product. Each finished unit requires four pounds of direct materials. The budgeted units to be produced over the next four months is as follows: Budgeted Units to be Produced January 16,000 units February 18,000 units March 25,000 units April 19,000 units The company wants to maintain monthly ending inventories of direct materials equal to 35% of the following month's production needs. The cost of the direct materials is $1.75 per pound. Calculate the total cost of direct materials budgeted to be purchased in March. Do not use decimals in your answer.

Explanation / Answer

Particulars January February March April Unita to be produced 16,000 18,000 25000 19000 Material Required for production ( x 4 pounds per unit) 64,000 72,000 100,000 76,000 Add: Ending Inventory (35% of next month production needs) 25200 35000 26600 Less: Opening Inventory 25200 35000 26600 Budgeted Material to be purchased 89,200 81,800 91,600 Per Unit Cost 1.75 1.75 1.75 1.75 total cost of direct materials budgeted to be purchased 156100 143150 160300

Related Questions

Navigate

• Browse (All)
• Browse X
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.