Question

Harris Corporation sells a single product. Budgeted sales for the year are anticipated to be 540,000 units, estimated beginning inventory is 128,000 units, and desired ending inventory is 90,000 units. The quantities of direct materials expected to be used for each unit of finished product are given below. Material D 0.50 lb. per unit @ $0.90 per pound Material E 1.00 lb. per unit @ $1.60 per pound Material F 1.20 lb. per unit @ $1.00 per pound The dollar amount of material D used in production during the year is 165000 175700 none of the above

Answer 1

The dollar amount of material D used in production = $225900

Thus answer is option (None of the above)

Explanation;

The dollar amount of material D used in production during the year will be calculated as follow;

First of all let’s calculate number of units to be produced;

Number of units to be produced (540000 units + 90000 units – 128000 units) = 502000 units

Material D required per unit is given = 0.50 lb. per unit

Thus total material D required (0.50 lb. * 502000) = 251000 lb.

Rate of material D is given = $0.90 per pound

Thus, dollar amount of material D used in production will be (251000 * $.90) = $225900