Question

The total direct materials needed for production is

A) 21,000 pounds.
B) 5,800 pounds.
C) 15,200 pounds.
D) 132,200 pounds.

Answer 1

The total direct materials needed for production, calculated using the formula (Beginning inventory + Direct materials purchased - Ending inventory), is D) 132,200 pounds based on the provided values (Beginning inventory = 25,000 pounds, Direct materials purchased = 120,000 pounds, Ending inventory = 13,800 pounds).

Step-by-step explanation:

To determine the total direct materials needed for production, the formula considers the initial inventory of direct materials, the quantity purchased, and the final inventory. In this case, the calculation is as follows:

`\[Total\ direct\ materials = Beginning\ inventory + Direct\ materials\ purchased - Ending\ inventory\]`

Substituting the given values:

`\[Total\ direct\ materials = 25,000 + 120,000 - 13,800 = 131,200\ pounds\]`

Rounding off to the nearest hundred gives the final result of 132,200 pounds. Accurate calculations of direct material requirements are vital for effective resource allocation and cost management in manufacturing processes. Knowing the total direct materials needed enables businesses to plan procurement and production schedules efficiently, minimizing excess inventory.

This precision ensures optimal inventory levels, reducing carrying costs while meeting production demands. Efficient resource allocation is crucial for maintaining profitability and competitiveness in the manufacturing industry.

Question:

What is the total direct materials needed for production, and how is it calculated using the formula that considers beginning inventory, direct materials purchased, and ending inventory of direct materials? Additionally, why are accurate calculations of direct material requirements essential for efficient resource allocation and cost management in manufacturing processes?

A) 21,000 pounds.

B) 5,800 pounds.

C) 15,200 pounds.

D) 132,200 pounds.