A manufacturing company is planning to sell 1,200 boxes of ceramic tile, with pr

Question

A manufacturing company is planning to sell 1,200 boxes of ceramic tile, with production estimated at 1,120 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor. Clay mix costs $0.50 per pound and employees of the company are paid $15.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. The company has 5,200 pounds of clay mix in beginning inventory and wants to have 6,000 pounds in ending inventory. What is the total amount to be budgeted in pounds for direct materials to be purchased for the month?

A. 48,480

B. 49,280

C. 50,080

D. 53,600

Explanation / Answer

As company estimated production during May is 1120 boxes for this he need raw material if 44 pounds for each box .the required material is 49280 pound (1120*44).

Also company wanted to add 800 pound extra in his ending inventory.

total amount to be budgeted in pounds for direct materials to be purchased for the month = 49280+800

= 50080 pounds

Option C is correct

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