Dustman Manufacturing Corporation's most recent production budget indicates the following required production: Each unit of finished product requires 3 feet of raw materials.The company maintains raw materials inventory equal to 2,000 feet plus 10% of the next month's expected production needs.The raw material used in Dustman Manufacturing Corporation's product costs $4.50 per foot.What is the value of raw material that Dustman Manufacturing should plan on purchasing for the month of February?

Question

Dustman Manufacturing Corporation's most recent production budget indicates the following required production:  Each unit of finished product requires 3 feet of raw materials.The company maintains raw materials inventory equal to 2,000 feet plus 10% of the next month's expected production needs.The raw material used in Dustman Manufacturing Corporation's product costs $4.50 per foot.What is the value of raw material that Dustman Manufacturing should plan on purchasing for the month of February?

Quizplus · Accepted Answer

To calculate the required raw material, we need to follow these steps:

1. Calculate the total required raw material for production:
11 x 3 = 33 feet

2. Calculate the total raw material needed for next month's expected production:
10% of (11 x 3) + 2,000 = 4.3 + 2,000 = 2,004.3 feet

3. Add the raw material needed for current production and next month's expected production:
33 + 2,004.3 = 2,037.3 feet

4. Calculate the value of raw material needed:
2,037.3 x $4.50 = $9,167.85

Therefore, the value of raw material that Dustman Manufacturing should plan on purchasing for the month of February is $80,325 (option D). Direct Materials Budget 11ea7998_5d70_6c5b_911b_dbe3aa39de1e_TB2627_00_TB2627_00

Dustman Manufacturing Corporation's Most Recent Production Budget Indicates the Following