Question

Mandy Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginnint inventory is 98,000 units, and desired ending inventory is 80,000 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 @ $.60 per poundMaterial B 1.00 lb per unit @ $1.70 per poundMaterial C 1.20 lb per unit @ $1.00 per poundThe dollar amount of direct material B used in production during the year is? The dollar amount of direct material C used in production during the year is? a.$1,057 b.400 c. $1,193,400 d.$1,026,800 e.$1,224,000

Answer 1

Answer:

material A = $186,600

material B = $1,057,400

material C = $746,400

Explanation:

Mandy corporation plans to sell 640,000 units this year. They only have 98,000 in beginning inventory and they want to have 80,000 in ending inventory. That means that they will need to produce 622,000 units this year: 640,000 - (98,000 - 80,000) = 622,000

Their total materials cost for the year will be:

material A) 622,000 x 0.5 lb x $0.60 per pound = $186,600

material B) 622,000 x 1 lb x $1.70 per pound = $1,057,400

material C) 622,000 x 1.2 lb x $1 per pound = $746,400