Below is budgeted production and sales information for Flushing Company for the month of December. The unit selling price for product XXX is $5 and for product ZZZ is $15.
-Stephanie Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 108,000 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 A 0.50 lb. per unit @ $0.70 per pound
Material B 1.00 lb. per unit @ $1.70 per pound
Material C 1.20 lbs. per unit @ $1.00 per pound
The dollar amount of Material A used in production during the year is
A)$217,700
B)$528,700
C)$311,000
D)$224,600

Question

Below is budgeted production and sales information for Flushing Company for the month of December.  The unit selling price for product XXX is $5 and for product ZZZ is $15.​
-Stephanie Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 108,000 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 A 0.50 lb. per unit @ $0.70 per pound
Material B 1.00 lb. per unit @ $1.70 per pound
Material C 1.20 lbs. per unit @ $1.00 per pound
The dollar amount of Material A used in production during the year is
A)$217,700 
B)$528,700 
C)$311,000 
D)$224,600

Quizplus · Accepted Answer

To find the dollar amount of Material A used in production during the year, first calculate the total units to be produced. This is based on the budgeted sales plus desired ending inventory minus beginning inventory: 640,000 + 90,000 - 108,000 = 622,000 units. Then, multiply the units by the amount of Material A per unit (0.50 lb.) and the cost per pound ($0.70): 622,000 units * 0.50 lb/unit * $0.70/lb = $217,700.

Below Is Budgeted Production and Sales Information for Flushing Company