Drive, Inc.determined its estimated production for the month is 300,000 units.Each unit requires 2 kilograms of material.The beginning direct materials are 1% of the current months expected needs.Ending inventory desired is 7,500 kilograms.How much are estimated direct materials purchases in kilograms?
A)601,500 kilograms
B)607,500 kilograms
C)301,500 kilograms
D)598,500 kilograms

Question

Quizplus · Accepted Answer

Beginning inventory = 300,000 units x 2 kg/unit x 1% = 6,000 kgEnding inventory desired = 7,500 kgTotal materials needed = 300,000 units x 2 kg/unit = 600,000 kgEstimated direct materials purchases = Total materials needed - Beginning inventory - Ending inventory desired= 600,000 kg - 6,000 kg - 7,500 kg= 586,500 kg