The following facts are known: · The total pounds needed for production are 2 times the units to be produced. · The desired ending direct materials inventory is 20% of the total pounds needed for production. · The beginning direct materials inventory is equal in number to 10% of the units to be produced. · Cost per pound is $10. · Total cost of the direct materials purchases is $1,610,000. Question: 1. How many units of direct materials should be purchased for the period? 2. How many units are to be produced for the period?
The following facts are known: · The total pounds needed for production are 2 times the units to be produced. · The desired ending direct materials inventory is 20% of the total pounds needed for production. · The beginning direct materials inventory is equal in number to 10% of the units to be produced. · Cost per pound is $10. · Total cost of the direct materials purchases is $1,610,000. Question: 1. How many units of direct materials should be purchased for the period? 2. How many units are to be produced for the period?
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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The following facts are known:
· The total pounds needed for production are 2 times the units to be produced.
· The desired ending direct materials inventory is 20% of the total pounds needed for production.
· The beginning direct materials inventory is equal in number to 10% of the units to be produced.
· Cost per pound is $10.
· Total cost of the direct materials purchases is $1,610,000.
Question:
1. How many units of direct materials should be purchased for the period?
2. How many units are to be produced for the period?
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