Production estimates for December are as follows: Estimated inventory (units), December 1 12,000 Desired inventory (units), December 31 9,000 Expected sales volume (units), December 75,000 For each unit produced, the direct materials requirements are as follows: Direct material A ($5 per lb.) 3 lbs. Direct material B ($15 per lb.) 1/2 lb. The total direct materials purchases of materials A and B required for December production is _____. a. $1,080,000 for A; $540,000 for B b. $1,125,000 for A; $562,500 for B c. $1,260,000 for A; $630,000 for B d. $1,170,000 for A; $585,000 for B
Production estimates for December are as follows: Estimated inventory (units), December 1 12,000 Desired inventory (units), December 31 9,000 Expected sales volume (units), December 75,000 For each unit produced, the direct materials requirements are as follows: Direct material A ($5 per lb.) 3 lbs. Direct material B ($15 per lb.) 1/2 lb. The total direct materials purchases of materials A and B required for December production is _____. a. $1,080,000 for A; $540,000 for B b. $1,125,000 for A; $562,500 for B c. $1,260,000 for A; $630,000 for B d. $1,170,000 for A; $585,000 for B
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...
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Question
Production estimates for December are as follows:
| Estimated inventory (units), December 1 | 12,000 |
| Desired inventory (units), December 31 | 9,000 |
| Expected sales volume (units), December | 75,000 |
For each unit produced, the direct materials requirements are as follows:
| Direct material A ($5 per lb.) | 3 lbs. |
| Direct material B ($15 per lb.) | 1/2 lb. |
The total direct materials purchases of materials A and B required for December production is _____.
a.
$1,080,000 for A; $540,000 for B
b.
$1,125,000 for A; $562,500 for B
c.
$1,260,000 for A; $630,000 for B
d.
$1,170,000 for A; $585,000 for B
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