Question

Roberto Company makes wooden foot stools and has prepared a sales budget of 15,000 finished units for the first quarter of 2020. The company has an inventory of 450 foot stools on hand at December 31, 2019 and has a target finished goods inventory of 750 foot stools at the end of the first quarter, 2020. It takes five (5) board feet of wood to produce a foot stool. The company has 15,000 board feet of wood on hand at December 31, 2019 and a target ending inventory of 3,750 board feet at the end of the first quarter, 2020. The wood costs $8 per board foot. What is the cost of direct material used in the first quarter of 2020?

Group of answer choices $588,000 $600,000 $522,000 $612,000

Answer 1

$522,000
Direct Material Purchases Budget
Units to be produced	15,300
Direct Material per unit	5
Production needs	76,500
Desired ending inventory	3,750
Total needs	80,250
Less: Beginning inventory	15,000
Purchases needed of Direct materials	65,250
Cost per board	$8
Total purchases of direct materials	$522,000
Production Budget
Sales Budget	15,000
Plus: Desired ending inventory	750
Total Inventory Requirements	15,750
Less: Beginning Inventory	450
Units to be Produced	15,300