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28 August, 06:00

Each unit of finished product requires 3 feet of raw materials. The company maintains raw materials inventory equal to 2,000 feet plus 10% of the next month's expected production needs. The raw material used in Dustman Manufacturing Corporation's product costs $4.50 per foot. What is the value of raw material that Dustman Manufacturing should plan on purchasing for the month of February?

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  1. 28 August, 07:27
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    Answer: $99,000

    Explanation:

    Given dа ta:

    Finished products = 1 unit requires 3 feet of material

    Raw material inventory = 2000 units + 10% for next month.

    Cost of raw materials = $4.50/foot

    Therefore:

    Since Dustman manufacturing maintains an inventory of 2000 units + 10% for next month.

    Total units needed for February would be

    = 20,000 units + 10% * 20,000

    = 20,000 + 2000

    = 22,000 units

    Value of raw materials for February

    = 22000 units * $4.50

    = $99,000
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