Question

the coat racks are moulded and then painted. each rack requires four kilograms of metal, which costs $2.50 per kilogram. the beginning inventory of materials is 4,000 kilograms. rack it up inc. wants to have 6,000 kilograms of metal in inventory at the end of the month. each rack produced requires 30 minutes of direct labour time, which is billed at $18 per hour. the total cost of materials (metals) required to be purchased for the month is:

Answer 1

The total cost of materials (metals) that Rack It Up Inc. needs to purchase for the month is $5,000. This is calculated by determining the additional inventory needed (2,000 kg) and multiplying it by the cost per kilogram ($2.50).

Step-by-step explanation:

To determine the total cost of materials required for the month, we need to calculate the amount of metal that needs to be purchased. Rack It Up Inc. starts with a beginning inventory of 4,000 kilograms and wants to have 6,000 kilograms by the end of the month.

First, calculate the ending inventory requirements:

• Desired ending inventory: 6,000 kilograms
• Beginning inventory: 4,000 kilograms
• Metal needed for production: (Ending inventory - Beginning inventory)

Now we can calculate the metal that will need to be purchased:

• Metal needed for production = 6,000 kg - 4,000 kg = 2,000 kg
• Cost per kilogram = $2.50
• Total cost of metal to be purchased = Metal needed for production x Cost per kilogram
• Total cost = 2,000 kg x $2.50/kg = $5,000

Therefore, the total cost of materials that Rack It Up Inc. needs to purchase for the month is $5,000.