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15 December, 18:21

Stephanie Corporation sells a single product. Budgeted sales for the year are anticipated to be 639,000 units, estimated beginning inventory is 101,000 units, and desired ending inventory is 82,000 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 @ $0.52 per pound Material B 1.00 lb. per unit @ $2.30 per pound Material C 1.20 lb. per unit @ $0.84 per pound The dollar amount of material A used in production during the year is

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  1. 15 December, 18:30
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    dollar value=$114452

    Explanation:

    We need to calculate the dollar value of material A needed during this year.

    First step is to calculate how many units are necessary

    Budgeted Sales = 639000 units

    Ending inventory=82000 units

    Beginning Inventory = 101000 units

    Production of the year = 620000 (639000+82000-101000)

    Second step is to calculate how much of material A is required

    620000 units*0,50lb/un = 310000lb

    Finally, we need to convert lb to pounds/$

    1lb=0,71 punds

    310000lb*0,71=220100pounds

    dollar value=220100*$0,52=114452
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