Stephanie Corporation sells a single product. Budgeted sales for the year are an

Question

Stephanie Corporation sells a single product. Budgeted sales for the year are anticipated to be 644,000 units, estimated beginning inventory is 104,000 units, and desired ending inventory is 90,000 units. The quantities of direct materials expected to be used for each unit of finished product are given below.

Material A 0.50 lb. per unit @ $0.73 per pound
Material B 1.00 lb. per unit @ $1.62 per pound
Material C 1.20 lb. per unit @ $0.94 per pound

The dollar amount of material A used in production during the year is

a.$235,060

b.$229,950

c.$710,640

d.$1,020,600

Explanation / Answer

Answer:- The dollar amount of material A used in production during the year is:-$229950 (Option b).

Explanation:-Total production units=Anticipated Sales units+ Desired ending inventory – Estimated beginning inventory

=644000 units+ 90000 units- 104000 units

=630000 units

The dollar amount of material A used in production=(630000 units* .50 Ib. Per unit)*$.73 per pound

=$229950

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