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23 March, 02:01

Crane Company required production for June is 112000 units. To make one unit of finished product, three pounds of direct material Z are required. Actual beginning and desired ending inventories of direct material Z are 290000 and 310000 pounds, respectively. How many pounds of direct material Z must be purchased

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  1. 23 March, 03:14
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    Purchases = 356,000 pounds

    Explanation:

    Giving the following information:

    Production = 112,000 units.

    Standard quantity = 3 pounds of direct material Z

    Beginning inventory = 290,000 pounds

    Desired ending inventory = 310,000 pounds

    To calculate the purchase required for direct material, we need to use the following formula:

    Purchases = production + desired ending inventory - beginning inventory

    Purchases = 112,000*3 + 310,000 - 290,000

    Purchases = 356,000 pounds
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