Ajax Manufacturing produces a single product, which takes 8.0 pounds of direct material per unit produced. The company's policy is to maintain an end-of- quarter inventory of materials equal to 25 percent of the following quarter's material requirements for production. Assume it is currently end of the first quarter of the new year, and that at the end of the prior 4th quarter, there were 16,000 pounds of material on hand. Required: a. How many units of product were planned for production in the first quarter? b. Under the assumption that production will increase by 10% in the second quarter, what are the direct material requirements (in pounds) for planned production in the second quarter?

Ajax Manufacturing produces a single product, which takes 8.0 pounds of direct material per unit produced. The company's policy is to maintain an end-of- quarter inventory of materials equal to 25 percent of the following quarter's material requirements for production. Assume it is currently end of the first quarter of the new year, and that at the end of the prior 4th quarter, there were 16,000 pounds of material on hand. Required: a. How many units of product were planned for production in the first quarter? b. Under the assumption that production will increase by 10% in the second quarter, what are the direct material requirements (in pounds) for planned production in the second quarter?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2EA: A company started a new product, and in the first month started 100,000 units. The ending work in...

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