Lester Production is planning to sell 600 boxes of ceramic tile, with production estimated at 580 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor. Clay mix costs $0.50 per pound and employees of the company are paid $15.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Lester has 2,600 pounds of clay mix in beginning inventory and wants to have 3,000 pounds in ending inventory.
What is the total amount to be budgeted in pounds for direct materials to be purchased for the month?

Question

Quizplus · Accepted Answer

Direct materials needed for production = 600 boxes x 44 pounds per box = 26,400 pounds
Add clay in ending inventory = 3,000 pounds
Total clay required = 26,400 + 3,000 - 2,600 (clay in beginning inventory) = 26,800 pounds
Total cost of clay = 26,800 pounds x $0.50 per pound = $13,400
Therefore, the total amount to be budgeted in pounds for direct materials to be purchased for the month is 26,800 pounds, which is option C.

Lester Production Is Planning to Sell 600 Boxes of Ceramic