Asked by ANGELITA BROOKS on Jul 22, 2024
Verified
Stephanie Corporation sells a single product. Budgeted sales for the year are anticipated to be 640,000 units, estimated beginning inventory is 108,000 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 @ $0.70 per pound
Material B 1.00 lb. per unit @ $1.70 per pound
Material C 1.20 lbs. per unit @ $1.00 per pound
The dollar amount of Material A used in production during the year is
A) $217,700
B) $528,700
C) $311,000
D) $224,600
Budgeted Sales
Projected sales for a future period, often used for planning and managing resources and setting goals.
Beginning Inventory
The value of a company's inventory at the start of an accounting period, which is carried over from the end of the previous period.
Ending Inventory
The value of goods available for sale at the end of an accounting period, calculated as the beginning inventory plus net purchases minus cost of goods sold.
- Evaluate anticipated production and sales quantifications given inventory and sales details.
Verified Answer
SN
SIERRA NANCEJul 24, 2024
Final Answer :
A
Explanation :
To find the dollar amount of Material A used in production during the year, first calculate the total units to be produced. This is based on the budgeted sales plus desired ending inventory minus beginning inventory: 640,000 + 90,000 - 108,000 = 622,000 units. Then, multiply the units by the amount of Material A per unit (0.50 lb.) and the cost per pound ($0.70): 622,000 units * 0.50 lb/unit * $0.70/lb = $217,700.
Learning Objectives
- Evaluate anticipated production and sales quantifications given inventory and sales details.