Question

ABC Company makes and sells a single product. It requires 2.5 pounds of direct materials to...

ABC Company makes and sells a single product. It requires
2.5 pounds of direct materials to produce one unit of this
product. Budgeted units to be produced for the next four
months is given below:

                  Budgeted Units to be Produced            
July                      21,000 units
August                    9,000 units
September                 31,000 units
October                   49,000 units

The company wants to maintain monthly ending inventories of
direct materials equal to 36% of the next month's production
needs. The cost of direct materials is $7 per pound.

Calculate the total cost of direct materials to be purchased
in July.

Homework Answers

Answer #1

--Total Cost of direct materials to be purchased in July = $ 291,900

July
A Units to be produced 21000
B Pounds required per unit 2.5 pounds
C = A x B Total material required for production 52500 pounds
D = 9000 units x 2.5 pounds x 36% Desired ending inventory of material 8100 pounds
E = C x 36% Beginning material inventory 18900 pounds
F = C+D-E Raw material to be purchased 41700 pounds
G Cost per pound $7
H = F x G Total Cost of direct materials to be purchased $291,900 Answer
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
ABC Company makes and sells a single product. It requires 2.5 pounds of direct materials to...
ABC Company makes and sells a single product. It requires 2.5 pounds of direct materials to produce one unit of this product. Budgeted units to be produced for the next four months is given below: Budgeted Units to be Produced July 23,000 units August 26,000 units September 9,000 units October 23,000 units The company wants to maintain monthly ending inventories of direct materials equal to 36% of the next month's production needs. The cost of direct materials is $3 per...
ABC Company makes and sells a single product. It requires 2.5 pounds of direct materials to...
ABC Company makes and sells a single product. It requires 2.5 pounds of direct materials to produce one unit of this product. Budgeted units to be produced for the next four months is given below: Budgeted Units to be Produced July 13,000 units August 40,000 units September 39,000 units October 37,000 units The company wants to maintain monthly ending inventories of direct materials equal to 36% of the next month's production needs. The cost of direct materials is $6 per...
ABC Company makes and sells a single product. It requires 4 pounds of direct materials to...
ABC Company makes and sells a single product. It requires 4 pounds of direct materials to produce one unit of this product. Budgeted units to be produced for the next four months is given below: Budgeted Units to be Produced July ?????? units August 17,000 units September 44,000 units October 28,000 units The company wants to maintain monthly ending inventories of direct materials equal to 28% of the next month's production needs. The cost of direct materials is $3.25 per...
ABC Company makes and sells a single product. It requires 4 pounds of direct materials to...
ABC Company makes and sells a single product. It requires 4 pounds of direct materials to produce one unit of this product. Budgeted units to be produced for the next four months is given below: Budgeted Units to be Produced July ?????? units August 17,000 units September 44,000 units October 28,000 units The company wants to maintain monthly ending inventories of direct materials equal to 28% of the next month's production needs. The cost of direct materials is $3.25 per...
ABC Company makes and sells a single product. It requires 4 pounds of direct materials to...
ABC Company makes and sells a single product. It requires 4 pounds of direct materials to produce one unit of this product. Budgeted units to be produced for the next four months is given below: Budgeted Units to be Produced July ?????? units August 17,000 units September 44,000 units October 28,000 units The company wants to maintain monthly ending inventories of direct materials equal to 28% of the next month's production needs. The cost of direct materials is $3.25 per...
Miami Company makes and sells a single product. It requires 4 pounds of direct materials to...
Miami Company makes and sells a single product. It requires 4 pounds of direct materials to produce one unit of this product. Budgeted units to be produced for the next four months is given below: Budgeted Units to be Produced July ?????? units August 17,000 units September 44,000 units October 28,000 units The company wants to maintain monthly ending inventories of direct materials equal to 28% of the next month's production needs. The cost of direct materials is $3.25 per...
Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 9.5 kilograms of...
Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 9.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows: August 24,200 units September 22,900 units October 24,300 units November 25,500 units December 25,200 units The company wants to maintain monthly ending inventories of Jurislon equal to 20% of the following month's production needs. On July 31, this requirement was not met since only 12,400 kilograms of Jurislon...
Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 6.5 kilograms of...
Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 6.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows: August 23,000 units September 21,700 units October 23,100 units November 24,300 units December 24,000 units The company wants to maintain monthly ending inventories of Jurislon equal to 20% of the following month's production needs. On July 31, this requirement was not met since only 11,200 kilograms of Jurislon...
Cowles Corporation, Inc. makes and sells a single product, Product R. Three yards of Material K...
Cowles Corporation, Inc. makes and sells a single product, Product R. Three yards of Material K are needed to make one unit of Product R. Budgeted production of Product R for the next five months is as follows: August 13,000 units September 13,500 units October 14,500 units November 13,600 units December 12,900 units The company wants to maintain monthly ending inventories of Material K equal to 30% of the following month's production needs. On July 31, this requirement was not...
Cowles Corporation Inc., makes and sells a single product, Product R. Three yards of Material K...
Cowles Corporation Inc., makes and sells a single product, Product R. Three yards of Material K are needed to make one unit of Product R. Budgeted production of Product R for the next five months is as follows: August 13,000 units September 13,500 units October 14,500 units November 13,600 units December 12,900 units The company wants to maintain monthly ending inventories of Material K equal to 30% of the following month's production needs. On July 31, this requirement was not...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT