Question

Use the information below for July production to answer the question that follow. Production estimates for July are as follows: Estimated inventory (units), July 1 8,500 Desired inventory (units), July 31 10,500 Expected sales volume (units), July 76,000 For each unit produced, the direct materials requirements are as follows: Direct material A ($5 per lb.) 3 lb. Direct material B ($18 per lb.) ½ lb. The number of pounds of Material A and Material B required for July production is a.225,000 lb. of A; 37,500 lb. of B b.234,000 lb. of A; 39,000 lb. of B c.216,000 lb. of A; 72,000 lb. of B d.216,000 lb. of A; 36,000 lb. of B

Answer 1

The correct answer is B.

Step-by-step explanation:

Giving the following information:

Estimated inventory (units), July 1 8,500 Desired inventory (units), July 31 10,500 Expected sales volume (units), July 76,000 For each unit produced, the direct materials requirements are as follows: Direct material A ($5 per lb.) 3 lb. Direct material B ($18 per lb.) ½ lb.

First, we need to calculate the required production units:

Sales= 76,000 units

Ending inventory= 10,500

Beginning inventory= 8,500 (-)

Total= 78,000

Direct material A= (78,000*3lb)= 234,000 lb

Direct material B= (78,000/2)= 39,000 lb