Question

Crane Company required production for June is 112000 units. To make one unit of finished product, three pounds of direct material Z are required. Actual beginning and desired ending inventories of direct material Z are 290000 and 310000 pounds, respectively. How many pounds of direct material Z must be purchased

Answer 1

Answer:

Purchases= 356,000 pounds

Explanation:

Giving the following information:

Production= 112,000 units.

Standard quantity= 3 pounds of direct material Z

Beginning inventory= 290,000 pounds

Desired ending inventory= 310,000 pounds

To calculate the purchase required for direct material, we need to use the following formula:

Purchases= production + desired ending inventory - beginning inventory

Purchases= 112,000*3 + 310,000 - 290,000

Purchases= 356,000 pounds