Question

# Data pertaining to the direct materials inventories are as follows:   Beginning Inventory Ending Inventory Wood 2,100...

Data pertaining to the direct materials inventories are as follows:
Beginning Inventory Ending Inventory
Wood 2,100 b.f. 1,600 b.f.
Fiberglass 1,100 yards 2,100 yards

Variable manufacturing overhead is \$20 per direct labor-hour. There are also \$28,770 in
fixed manufacturing overhead cots budgeted for 2018. Both variable and fixed overhead
costs are allocated based on direct manufacturing labor-hours.

Other data include the following:
2017 Unit Price 2018 Unit Price
Wood \$38.00 per b.f. \$40.00 per b.f.
Fiberglass \$14 per yard \$15 per yard
Direct labor \$34.00 per hour \$35.00 per hour

Assume Fullerton uses a FIFO inventory method for both direct materials and finished
goods. Ignore work in process in your calculations.

What is total cost of direct materials to be used?
\$3,352,250
\$4,135,300
\$4,217,500
\$3,714,250

Explanation:

units Producted

 Budgeted selling units 3910 Desired ending units 900 Total units required 4810 Less: Opening units 700 Units to be Produced 4110

Cost of materias used:

 Particulars Wood Fiberglass Units to be Produced 4110 4110 Material req per unit 17 15 material req for production 69870 61650 Beginning material 2100 1100 Cost \$38 \$14 Total cost(A) \$79,800 \$15,400 Purchased material 67770 60550 Cost \$40 \$15 Total cost(B) \$2,710,800 \$908,250 cost of materials used(A+B) \$2,790,600 \$923,650

Total cost = \$2,790,600 + \$923,650 = \$3,714,250

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