Direct material purchases equal:
A)production needs plus beginning inventories.
B)production needs plus target ending inventories.
C)production needs.
D)production needs plus target ending inventories less beginning inventories.

Question

Quizplus · Accepted Answer

Direct material purchases are calculated by adding the production needs and target ending inventories, then subtracting the beginning inventories. This accounts for the materials needed for production, the desired inventory level at the end of the period, and the materials already on hand at the beginning of the period.

Direct Material Purchases Equal