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Natalija [7]
3 years ago
13

Flagstaff Company has budgeted production units of 7,900 for July and 8,100 for August. The direct materials requirement per uni

t is 2 ounces (oz.). The company requires to have safety stock of direct materials on hand at the end of each month to complete 20% of the units of budgeted production in the following month. There was 3,160 ounces of direct material in inventory at the start of July. The total ounces of direct materials to be purchased in July is:
a. 15,720 oz.
b. 15,880 oz.
c. 16,200 oz.
d. 15,800 oz.
e. 19,040 oz.
Business
1 answer:
Marysya12 [62]3 years ago
8 0

Answer:

Purchases= 15,880 ounces

Explanation:

Giving the following information:

Production:

July= 7,900

August= 8,100

The direct materials required per unit are 2 ounces (oz.).

Desired ending inventory= 20% of the units of budgeted production in the following month.

Beginning inventory= 3,160 ounces

<u>To calculate the direct material purchase, we need to use the following formula:</u>

<u></u>

Purchases= production + desired ending inventory - beginning inventory

Purchases= 7,900*2 + (8,100*2)*0.2 - 3,160

Purchases= 15,880 ounces

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EA14.
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Answer:

work in process    debit

  raw materials inventory  credit

--to record assignment of DM to work in process--

work in process   debit

 wages payable               credit

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