Which of the following is the basic formula of the direct materials usage budget?
A) Ending inventory of direct materials + direct materials purchased and used during the period = direct materials to be used this period
B) Beginning inventory of direct materials + direct materials purchased and used during the period = direct materials to be used this period
C) units used in production + target ending inventory - beginning inventory = purchases to be made for the budget period
D) units used in production + target beginning inventory - ending inventory = purchases to be made for the budget period

Question

Quizplus · Accepted Answer

The basic formula of the direct materials usage budget is Beginning inventory of direct materials + direct materials purchased and used during the period = direct materials to be used this period. This equation takes into account the beginning inventory of direct materials and the amount of direct materials that are expected to be purchased and used during the budget period to determine the total direct materials that will be used in production.

Which of the Following Is the Basic Formula of the Direct