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5 July, 16:34

Haft Construction Company determines that 54,000 pounds of direct materials are needed for production in July. There are 3,200 pounds of direct materials on hand at July 1 and the desired ending inventory is 2,800 pounds. If the cost per unit of direct materials is $3, what is the budgeted total cost of direct materials purchases?

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  1. 5 July, 17:15
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    cost of direct materials purchases 160,800

    Explanation:

    pounds required for production 54,000

    desired ending inventory 2,800

    total needs 56,800

    beginning inventory (3,200)

    units to be purchased 53,600

    cost per unit of direct materials 3

    cost of direct materials purchases 160,800

    Notes:

    The pounds for production and the ending inventory are the raw materials demand.

    The beginning inventory is a portion we already have, so we need to purchase less.

    Then, we multiply the pounds to be purchased by their cost to get the total cost for direct materials
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