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. 51,040

B. 50,240

C. 51,840

D. 53,600

Explanation / Answer

Direct Materials Budget for the month of May   Details Amt /Qty Estimated sales in the month                          1,200 boxes lbs of clay required from production @44 lbs/box                        52,800 Add Required ending inventory of clay lbs                          6,000 Less Opening inventory of clay lbs                        (5,200) lbs of clay mix to be purchased =                        53,600 So Answer is D $53,600 * the sales data is taken for calculation assuming the opeing and cloisng of clay covers the production requirements .

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