Mancini Corporation sells a single product. Budgeted sales for the year are anti

Question

Mancini Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 98,000 units, and desired ending inventory is 80,000 units. The quantities of direct materials expected to be used for each unit of finished product are given below.

Material A .50 lb per unit @ $.60 per pound
Material B 1.00 lb per unit @ $1.70 per pound
Material C 1.20 lb per unit @ $ 1.00 per pound

The amount of direct materials A purchased during the year is:

A. $186,600
B. $181,200
C. $240,000
D. $210,600

Explanation / Answer

Total number of units to be used = 640,000 - 98,000 + 80,000 = 622,000 units

Material A .50 lb per unit @ $.60 per pound, Hence for 622,000 units cost

= 622,000 units x 50 lb per unit x $.60 per pound = $186,600

ANS: A $186,600

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