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 lb.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

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 lb.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 calculate the dollar amount of material A used in production during the year, first determine the total amount of material A needed for production. This is done by calculating the total units to be produced (budgeted sales + desired ending inventory - beginning inventory = 640,000 + 90,000 - 108,000 = 622,000 units). Then, multiply the total units by the amount of material A per unit (622,000 units * 0.50 lb. = 311,000 lbs.). Finally, multiply the total pounds of material A by its cost per pound (311,000 lbs. * $0.70 = $217,700).

Stephanie Corporation Sells a Single Product