Mandy Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 98,000 units, and desired ending inventory is 80,000 units. The quantities of direct materials expected to be used for each unit of finished product are given below. Material A .50 lb. per unit @ $ .60 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 direct material C used in production during the year is:

Question

Quizplus · Accepted Answer

Direct material C used in production = (Budgeted sales + Desired ending inventory - Estimated beginning inventory) * Direct material C per unit * Direct material C cost per pound= (640,000 + 80,000 - 98,000) * 1.20 * 1.00= 522,000 * 1.20 * 1.00= $626,400

Mandy Corporation Sells a Single Product