Question

"In preparing the direct materials budget for Quan Company, management concludes that required purchases are 64,000 units. If 52,000 direct materials units are required in production and there are 9,000 units of beginning direct materials, what is the desired units of ending direct materials

Answer 1

desired ending inventory= 21,000

Step-by-step explanation:

Giving the following information:

In preparing the direct materials budget for Quan Company, management concludes that required purchases are 64,000 units. If 52,000 direct materials units are required in production and there are 9,000 units of beginning direct material.

To calculate the desired ending inventory, we need to use the following formula:

Purchases= production + desired ending inventory - beginning inventory

desired ending inventory= purchases - production + beginning inventory

desired ending inventory= 64,000 - 52,000 + 9,000

desired ending inventory= 21,000