20) Dustman Manufacturing Corporation\'s most recent production budget indicates

Question

20) Dustman Manufacturing Corporation's most recent production budget indicates the following required production: January February March April 4,000 6,000 5,500 5,000 Required production (units) Each unit of finished product requires 3 feet of raw materials. The company maintains raw materials inventory equal to 2,000 feet plus 10% of the next month's expected production needs. The raw material used in Dustman Manufacturing Corporation's product costs $4.50 per foot. What is the value of raw material that Dustman Manufacturing should plan on purchasing for the month of February? A) $73,575 B) $74,250 C) $81,000 D) $80,325

Explanation / Answer

Answer is D. $ 80,325 Explanation: RAW MATERIAL PURCHASE BUDGET Jan Feb march QUARTER April Budgeted Production units 4,000 6,000 5,500 15,500 5,000 Raw material units required 3 3 3 3 3 Total production needs 12,000 18,000 16,500 46,500 15,000 Add: Desired Ending Inventory 3,800 3,650 3,500 3,500 Total needs 15,800 21,650 20,000 50,000 Less: Beginning Inventory 3,200 3,800 3,650 3,200 Purchase Units 12,600 17,850 16,350 46,800 Cost price per unit 4.50 4.50 4.50 4.50 Budgeted Purchase in $ 56,700 80,325 73,575 210,600

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.