Question

Production estimates for July are as follows:Estimated inventory (units), July 1 8,500Desired inventory (units), July 31 10,500Expected sales volume (units), July 76,000For each unit produced, the direct materials requirements are as follows:Direct material A ($5 per lb.) 3 lbs.Direct material B ($18 per lb.) 1/2 lb.The number of pounds of materials A and B required for July production is:

Answer 1

Answer:

Material A = 234,000 lbs.

Material B = 39,000 lbs.

Explanation:

First we must determine how many units we have to manufacture:

expected sales + ending inventory - beginning inventory =  76,000 + 10,500 - 8,500 = 78,000 units to be manufactured

now we calculate the amount of direct materials used:

Material A: 78,000 units x 3 lbs. per unit = 234,000 lbs.

Material B: 78,000 units x 1/2 lb. per unit = 39,000 lbs.