Question

Lion Industries required production for June is 132,000 units. To make one unit of finished product, three pounds of direct material Z are required. Actual beginning and desired ending inventories of direct material Z are 300,000 and 330,000 pounds, respectively. How many pounds of direct material Z must be purchased? Question 5 options: 378,000 396,000 408,000 426,000

Answer 1

Option (D) is correct.

Step-by-step explanation:

Total material requirement:

= Materials needed for production in pounds + Budgeted ending inventory

= 132,000 × 3 + 330,000

= 396,000 + 330,000

= 726,000

Direct material to be purchased (in pounds):

= Total material requirement - Beginning Inventory (in pounds)

= 726,000 - 300,000

= 426,000

Therefore, 426,000 pounds of direct material Z must be purchased.