Ask Question
5 February, 02:26

Production estimates for July for Starling Co. are as follows: Estimated inventory (units), July 1 8,500 Desired inventory (units), July 31 10,500 Expected sales volume (units), July 76,000 For each unit produced, the direct materials requirements are as follows: Material A ($5 per lb.) 3.0 lbs. Material B ($18 per lb.) 0.5 lb. The total direct materials purchases of Materials A and B (assuming no beginning or ending materials inventory) required for July production is a.$1,080,000 for A; $1,296,000 for B b.$1,080,000 for A; $648,000 for B c.$1,170,000 for A; $702,000 for B d.$1,125,000 for A; $675,000 for B

+4
Answers (1)
  1. 5 February, 05:53
    0
    Material Purchase Budget:

    Material A: $1,170,000

    Material B: $702,000

    Explanation:

    Material purchase budget = Material usage budget * standard price

    Material usage budget = Production budget * standard usage

    Production budget = sales + closing inventory - opening inventory

    Production budget = 76,000 + 10,500 - 8,500 = 78,000

    Material purchase budget = Material usage budget * standard price

    Material Purchase Budget:

    Material A: 3 * 78,000 * $5 = $1,170,000

    Material B: 0.5 * 78,000 * $18 = $702,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Production estimates for July for Starling Co. are as follows: Estimated inventory (units), July 1 8,500 Desired inventory (units), July 31 ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers