Production estimates for August are as follows: $\begin{array}{lr}
\text { Estimated inventory (units), August 1 } & 12,000 \
\text { Desired inventory (units), August } 31 & 9,000 \
\text { Expected sales volume (units), August } & 75,000
\end{array}$
$\text { For each unit produced, the direct materials requirements are as follows: }$
$\begin{array}{ll}
\text { Direct material A }(\$ 5 \text { per } 1 \mathrm{~b} .) & 3 \mathrm{lbs} . \
\text { Direct material B }(\$ 15 \text { per } 1 \mathrm{~b} .) & 1 / 2 \mathrm{lb} .
\end{array}$ ? The total direct materials purchases of materials A and B required for August production is:
A) $1,260,000 for A; $630,000 for B.
B) $1,080,000 for A; $540,000 for B.
C) $1,125,000 for A; $562,500 for B.
D) $1,170,000 for A; $585,000 for B.

Question

Quizplus · Accepted Answer

To find the production requirement: 75,000 (sales) + 9,000 (desired ending inventory) - 12,000 (beginning inventory) = 72,000 units to be produced. For material A: 72,000 units * 3 lbs/unit * $5/lb = $1,080,000. For material B: 72,000 units * 0.5 lbs/unit * $15/lb = $540,000.

Production Estimates for August Are as Follows For each unit produced, the direct materials requirements are as follows: \text { For each unit produced, the direct materials requirements are as follows: } For each unit produced, the direct materials requirements are as follows:

Production Estimates for August Are as Follows $\text { For each unit produced, the direct materials requirements are as follows: }$